Netflix Inc (NASDAQ:NFLX) earned the title of “king in streaming” from analysts at Bank of America, who reiterated their Buy rating for the company and upped their price target to $585 from $525.
“It is becoming increasingly clear that Netflix has won the ‘streaming wars,’” analysts wrote. “Over the last 18 months, changing market dynamics, investor focus on profitability, and the various talent strikes have led several media companies to re-evaluate their streaming aspirations.”
“These changes ... have been a tacit acknowledgment that not all media companies will be able to achieve Netflix's global reach and scale in streaming,” they added.
BofA also believes Netflix still has room to grow revenue from both its crackdown on password sharing and its $6.99 advertising video on demand tier.
“[T]he ad-supported tier provides an attractive low-priced option for ‘borrowers’ who still wish to access the Netflix service,” the analysts wrote. “In our view, the broader crackdown on password sharing will be an accelerant to NFLX's ad-supported tier.”
Looking ahead, BofA upped its fourth-quarter revenue forecast to $8.79 billion from $8.69 billion.
Shares of Netflix traded 0.7% lower Wednesday morning at $477.86.