Goldman Sachs Group Inc. (NYSE: GS) is getting more aggressive on Netflix shares following its great turnout in gains so far this year.
They are hoping the Netflix shares jump and increased their price target from $390 to $490, showing a 35 percent growth from Tuesdays closing numbers. It is its highest target out of the 36 analysts who cover netflix, according to comments told to CNBC.
“We believe the growing content offering and expanding distribution ecosystem will continue to drive subscriber growth above consensus expectations. Based on the pace of both, we’re raising our revenue estimates and price target,” analyst Health Terry wrote in a note to clients on Wednesday. Analysts predicts Netflix will add about 32.5 million net subscribers in 2019 which ascends the Wall Street consensus of 26 million subscribers. Terry also indicated the company's guidance to spend $2 billion in marketing for fiscal 2018.
Netflix stock has gone up 2.5 percent in early trading Wednesday. Its total shares are up about 90 percent this year through Tuesday, making the second best performance in the S&P 500. Its market value of the company has risen by approximately $96 billion in the previous 12 months.
“We believe Netflix's ability to spend significantly more on customer acquisition while still producing ~4pps of operating margin expansion for the full year, on our estimates, will allow the company to drive additional subscriber growth, particularly in markets where the company's brand presence isn't as strong as it is in the U.S.,” he said.