Netflix
stock was rising Tuesday after two analysts raised their price targets on the stock, and after a report said the company might start live-streaming sports events with a celebrity golf tournament this fall.
The company is in early discussions to air the golf tournament, which features both professional players and Formula One drivers, The Wall Street Journal reported, citing unidentified people familiar with the situation.
Netflix declined to comment.
That would be the first live sports streaming by
Netflix
(ticker: NFLX). Executives have been debating the idea for more than a year, according to the Journal report. Other rival streaming services have already started to pick up sporting events such as baseball and football games, while Netflix has streamed live comedy events in the past. In December, the National Football League awarded YouTube TV a multiyear deal to air the NFL Sunday Ticket package of out-of-town games.
Carrying live sports events would be a new opportunity for Netflix’s new advertising business. It only recently introduced a cheaper subscription tier with ads.
Netflix shares climbed 2.1% to $433.04 Tuesday and were on pace for their highest close since February 2022, according to Dow Jones Market Data.
It wasn’t just excitement over the report of potentially streaming live sports that sent the stock higher. BofA Securities analyst Jessica Reif Ehrlich increased her price target on Netflix to $490 from $410 and maintained her Buy rating on the stock Tuesday. She cited confidence in the streaming giant’s path to crack down on password sharing as a reason for the target price increase.
According to research firm Antenna, after Netflix alerted subscribers in the U.S. that it would start to curb password sharing on May 23, the company had the four single largest days of U.S. user acquisition in the 4½ years Antenna has been tracking the data.
“If we assume slightly over 60% of password borrowers in the U.S. are converted, we estimate password sharing could represent a $2 billion incremental annualized revenue opportunity,” Reif Ehrlich said.
And she isn’t alone in this optimism. Guggenheim analyst Michael Morris gave his price target on Netflix a major upgrade, to $500 from $375. He also maintained his Buy rating on the stock.
“We expect the company’s paid sharing initiative to contribute meaningfully to total company economics,” Morris said in a research note Tuesday. “Specifically, we estimate that more restrictive measures on usage outside the home will support growth to about 21 million paid-sharing sub accounts and about 15.4 million ad-supported accounts through 2Q24.”
Write to Brian Swint at [email protected] and Angela Palumbo at [email protected]
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