Orcs and fairies helped push Netflix investor enthusiasm to a new high-water mark.
Shares of Netflix closed at $205.05 per share, up 2%, on Wednesday — marking a new all-time high for the streaming-video player. The stock had hit an intraday high of $206.21 per share.
The stock rally came after Netflix announced earlier in the day that it has officially greenlit a sequel to “Bright,” the cop/fantasy movie with a reported $90 million production budget. Will Smith and Joel Edgerton are on board to reprise their roles, with David Ayer returning to write and direct the second installment.
The peak for Netflix shares comes after the stock closed up 4.7% on Tuesday following the New Year’s Day break, buoyed by a pair of bullish analyst reports underscoring the company’s lead over rivals and its opportunity for international growth.
Macquarie Research’s Tim Nollen upgraded Netflix from “neutral” to “outperform” and raised his price target from $200 to $220 per share. “Netflix is miles ahead of peers,” he wrote in a research note, adding that Disney’s subscription video-streaming service “is still two years away and won’t threaten Netflix.”
Meanwhile, Loop Capital Markets analyst David Miller called Netflix “the best idea of 2018,” raising the price target on the stock from $237 to $241 per share. “While last year’s subscriber growth was notable, we expect to see true operating leverage out of Netflix this year,” he wrote in a report. “[W]e believe the company is poised to deliver that at a level well beyond what we witnessed in 2017.”
Netflix shares previously hit all-time high closing price of $202.68 per share on Oct. 16, 2017, prior to reporting Q3 results.
“Bright,” despite generally poor reviews, has apparently performed well for Netflix. In announcing the pickup of the sequel, the company said it was the most-viewed Netflix original film ever on the service in its first week of release, but it didn’t release specific numbers. Since its Dec. 22 premiere, “Bright” has been the No. 1 movie on Netflix in every country (spanning more than 190 countries and territories), according to the company.
Last week, Nielsen said “Bright” was viewed by 11 million people in the U.S. over the first three days of release. That’s a lower audience than the first episode of “Stranger Things” Season 2, but a bigger hit than the second season’s premiere episode of “The Crown.”
Netflix has said that in 2018 it will spend between $7 billion and $8 billion on content (on a profit-and-loss basis), including a slate of 80 original films. Last year, original content represented more than 25% of total programming spending, and that will continue to grow, according to the company.