Original Content and Pricing Power are Leading Catalysts for Netflix
Netflix is becoming more of a must-have streaming service, putting the company in a position to jack up prices without losing a significant portion of subscribers, according to Cowen. The firm raised its price target to $535 from $485 on Tuesday morning, suggesting 20% upside for the stock. Cowen expects strong Q2 driven by solid engagement due to the COVID-19 pandemic.
"While we don't expect NFLX to raise prices this year, increased pricing power leaves the co well positioned into 2021 and beyond," said Cowen in a recent note.
Content pipeline: July will be a busy month for Netflix, a period when the company is set to release 59 new original pieces of content ranging from TV shows to documentaries. Keep an eye out for the final season of Last Chance U, the remake of The Babysitters Club, and The Karate Kid trilogy.
Kicking theaters while they’re down: The spike in coronavirus cases across the country has forced AMC Theatres to push back its reopening plan by two weeks. This also follows the delay of potential blockbuster films such as Mulan and Tenet by Hollywood. With a growing portfolio of original content and increasing uncertainty surrounding a reopening, Netflix’ lack of dependence on third-party content puts it in control of its own future.
