Netflix shares rise on upgrade: 'Unstoppable lead in subscription video streaming'

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Netflix CEO and founder Reed Hastings

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Netflix shares were upgraded to buy from hold by Loop Capital Markets on Monday, saying the digital media company stock is set to climb more than 25%.

“We continue to think that NFLX has built an unstoppable lead in subscription video streaming and the margin opportunity is expanding as it increasingly becomes content producer, distributor and retailer,” Loop analyst Alan Gould said in a note to investors. Gould noted that the rating upgrade comes as Loop added internet industry analyst Rob Sanderson to the firm’s team.

There’s a “structural difference” to Netflix’s advantage compared to that of cable networks or digital competitors, Loop said. Netflix has a “combination of content production, aggregation and distribution” that “should lead to a greater share of the value chain and ultimately higher margin for streamers that achieve massive scale.”

Netflix shares rose nearly 1% in premarket trading from Monday’s close of $336.63 a share. The shares are down 12% in the last month amid a broader market pullback. Loop has a $425 price target on Netflix shares.

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