A Wall Street analyst sees positive momentum continuing for streaming video leader Netflix as the company moves more into live sports and plans to open "experiential entertainment venues." Netflix stock rose on Tuesday.
Argus Research analyst Joseph Bonner reiterated his buy rating on Netflix stock and raised his price target to 767 from 660.
On the stock market today, Netflix stock advanced 0.9% to close at 679.58.
On May 20, Netflix stock broke out of a cup base at a buy point of 639, according to IBD MarketSurge charts. It is currently extended beyond the 5% chase zone of its breakout.
Netflix Scores Ad Wins With Live Sports
"We see the company's incremental moves into live event sports programming as particularly directed to enhancing its advertising market as live events have a higher value for advertisers than typical scripted content and the NFL holds the most value in the U.S. sports broadcast ecosystem," Bonner said in a client note.
Netflix launched its lower-priced, advertising-supported subscription plan in November 2022.
On May 15, Netflix announced a deal with the National Football League to carry two NFL games on Christmas Day this year. Plus, it will stream at least one Christmas Day football game in 2025 and in 2026.
The NFL deal follows Netflix's agreement to carry the WWE's flagship pro wrestling program "Raw" starting in January 2025.
Netflix Stock On Three IBD Lists
"Live event programming/advertising is not the only new niche revenue stream Netflix is looking to exploit," Bonner said. "On June 20, the company announced 'Netflix House, an experiential entertainment venue.'"
Netflix is planning two locations for Netflix House in shopping malls in Dallas and King of Prussia, Pa., in 2025. They will feature entertainment, dining and retail experiences, the company said.
"While Disney World it's not, Netflix House builds on smaller, earlier company concepts around building fandom for its intellectual property through experiential entertainment," Bonner said.
The initiative is a way to solidify its subscriber base and possibly create a new revenue stream over time, Bonner said.
Netflix stock is on three IBD lists: IBD 50, Big Cap 20 and Stock Spotlight. Netflix stock has a best-possible IBD Composite Rating of 99, according to IBD Stock Checkup.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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