Netflix Price Target Raised to Street-High $670 by Goldman

Netflix is about to beat expectations for subscriber growth when it reports Q2 earnings next week, according to Goldman Sachs, which raised its price target for the stock to a street-high $670 (up from $540). Analyst Heath Terry anticipates at least 12.5 million net subscriber adds, with quarterly app downloads reaching a record high and y/y downloads growth hitting its highest mark since 1Q16. 

Unmatched content: The stay-at-home trend is a popular catalyst for many digital-first companies, but Netflix is still competing with countless other content providers for consumers’ attention. But growth in content on the platform and unmatched entertainment hours are driving more downloads, and less churn. Netflix’s content slate included films such as Extraction, as well as new seasons for shows such as Money Heist, 13 Reasons Why, Space Force, and Jeffrey Epstein: Filthy Rich. If churn levels were consistent with Q1’s, then Netflix could add 14.5-15.5 million additional subscribers, according to Terry.  

Geographic breakdown: Terry expects growth from Asia Pacific to lead the way, echoing the outlook from Wells Fargo Securities analyst Steven Cahall. Goldman predicts 5.1 million paid net adds from APAC. Goldman expects 4 million from Europe, Middle East, Africa, 1.4 million paid net adds from the U.S./Canada, 2 million from Latin America.