Netflix got a boost on Wednesday morning after Goldman Sachs (NYSE:GS) upped its price target on the stock to Neutral from Sell.
Alongside the rating upgrade, analysts at the investment bank raised the price target by $170 to $400 per share, citing the positive operating performance and continued momentum heading into the second half of the year.
In a note, Goldman Sachs (NYSE:GS) highlighted Netflix's success in executing its password-sharing initiative and the reduced competition in the industry. Since being added to Goldman Sachs' 'Sell' list in June last year, Netflix shares have surged 135%, compared to a 12.5% gain for the S&P 500.
According to The Wall Street Journal, Netflix experienced its best four-day sign-up period in four years at the end of May after notifying users in the US about limiting password sharing. Netflix has been implementing its 'paid sharing' initiative, starting with countries like Canada, New Zealand, Spain, and Portugal, and finally focusing on the US.
The company's crackdown on password sharing aims to mitigate the impact on long-term investments and improvements and may boost overall subscriber gains.
Netflix shares started the trading day Wednesday 1.5% higher at $447.70.
Contact Angela at angela@proactiveinvestors.com
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