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Pivotal Research boosts Netflix price target to 'street high’

Yahoo Finance’s Dan Howley joins Kristin Myers to discuss Pivotal Research’s new price target on Netflix.

Video Transcript

KRISTIN MYERS: Well, let's talk Netflix right now. One analyst from Pivotal Research is boosting their stock price to $650. That is a high for the Street. So for more on this, we're joined now by Yahoo Finance's [INAUDIBLE] Dan Howley. Hey, Dan.

DAN ROBERTS: Hey, Kristin, that's right. This is a $50 boost to the price target. And essentially, what's going on here is the analyst is saying that while we've seen that pull forward of Amazon subscribers from the original outbreak, when people started locking down and had nothing to do, but Netflix and, you know, I guess, Netflix, we are going to see potentially some slowdown in subscriber growth, maybe even some pullback in subscriber growth as we go through the rest of the year.

But that doesn't mean that in 2021, that we won't see a return to growth again. Now, what the thesis here is, is that these people who signed up likely were going to sign up anyway at some point.

But with sports coming back to a degree, and as you and Emily were just discussing, we'll see how long that lasts, what kind of knock-on effects will be in the greater sports world. But more outdoor gatherings being allowed, Netflix could see that kind of turn downward for a hot minute. But then eventually, it will start rising again.

They also have kind of going against Netflix is the fact that it hasn't been able to get new content as quickly as in past years, possibly because we've seen production shut down on a number of films and TV shows. Some started back up. Some were put back to being on hold again. Some shows have been canceled outright. I know "Glow" recently was canceled after they had to go on hold for a bit.

So there's a lot going on with Netflix right now. I think going forward into the future, though, the thesis is that it will return to what we saw, as far as subscriber growth goes.

KRISTIN MYERS: All right, well, thanks a lot, Dan, because I had not known that "Glow" was canceled. And "Glow" is one of my favorite Netflix shows. So--

DAN ROBERTS: I'm sorry.

KRISTIN MYERS: --thank you so much, Dan Howley.