Netflix’s stock, extending its three-day rally, closed up 3.2%, to $426.75 per share. That gives Netflix a current market capitalization of $187.3 billion, putting it just over Disney’s $186.6 billion, after the media conglomerate’s stock finished down 2.5% amid a broader market decline Wednesday. Previously, Netflix’s all-time high closing stock price was $418.97 on July 9, 2018.
Investors clearly are expecting Netflix to benefit from the COVID-19 crisis, with millions of people under stay-at-home orders — and looking for a diversion.
Netflix is scheduled to report first quarter 2020 earnings next Tuesday, April 21, after market close. It previously forecast total paid net adds of 7.0 million worldwide. Many analysts expect Netflix to gain more than that.
Pivotal Research Group now expects Netflix to net 8.45 million new subscribers for Q1. In a note Wednesday, analyst Jeffrey Wlodarczak raised his price target on the stock from $425 to $490 per share. “We believe the unfortunate COVID-19 situation is cementing NFLX’s global [direct-to-consumer] dominance partly driven by the incremental content spend that is enabled by their massive and growing subscriber base,” Wlodarczak wrote.
Cowen & Co. more conservatively estimates overall 7.1 million net new Netflix paid subscribers (including 772,000 in the U.S. and Canada) for the first three months of 2020.
“We expect a strong [quarter] driven by a solid slate of originals coupled with a captive audience due to the COVID-19 pandemic,” lead analyst John Blackledge wrote in an April 15 note. Cowen also raised the price target on Netflix stock, from $425 to $445 per share.
Streaming has boomed during the quarantine, with U.S. viewing of internet video on TVs up 109% in March 2020 compared with the comparable four-week period in 2019, according to Nielsen data.
To be sure, Disney Plus also has cashed in on the global coronavirus lockdown, but many of the rest of the company’s businesses have been significantly disrupted by the crisis. Disney’s family-friendly streaming service surpassed 50 million paying customers worldwide, the company announced last week, buoyed by its recent launch in India and eight Western European countries.
Meanwhile, other “stay-at-home” stocks have also climbed in the past month: Amazon’s shares closed at an all-time high Tuesday, and they set a new record Wednesday after inching up 1.1%.