Netflix shares are seeing their largest bounce in 4 years

The Tiger King overview page of the Tiger King documentary mini-series from Netflix Inc. is displayed on a laptop.

Gabby Jones | Bloomberg | Getty Images

Netflix stock rose up to 18% on Wednesday to trade at an all-time high, a day after the company announced in its fourth quarter 2020 earnings report that it was considering share buybacks and exceeded 200 million subscribers for the first time .

It’s the biggest jump since the company’s stock closed 19% on October 18, 2016. The stock closed 16.8% on Wednesday.

“We have evolved from a historic NFLX bear to a card-carrying bull,” Wells Fargo analysts said in a statement to customers on Wednesday. The company raised its price target from $ 510 to $ 700 per share. At least 15 other companies have also raised their price targets.

The video streaming giant expects cash flow to develop positively after 2021, which will help analysts get on their feet.

“We remain bulls in NFLX history as NFLX offers consumers an increasingly compelling, one-of-a-kind entertainment experience on virtually any device, with no advertising, at still relatively low costs,” analysts for the Pivotal Research Group said in a statement on Wednesday.

Netflix has benefited from the home stay boom as the pandemic has left millions of people in need of entertainment on a daily basis from the comfort of their homes. This likely contributed to the fact that the number of paid subscribers rose to over 200 million for the first time. In 2017, 100 million subscribers were reached.

Netflix’s growth also comes as streaming wars intensify. The competition from Apple TV +, Discovery +, Disney +, HBO Max from WarnerMedia from AT & T and Peacock from CNBC parent NBCUniversal. ViacomCBS’s Paramount + is expected to be released in March.

“We continue to believe that the bear fall for competition that is hindering the long-term success of NFLX is overdone,” Jefferies analysts said Tuesday. “Some competitors will succeed and others will not, but the big picture is that there will be multiple winners in the OTT streaming space and we expect NFLX to stay at the top of the food chain.”

Disclosure: NBCUniversal is the parent company of CNBC.

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