Massive viewer interest in the fight between Mike Tyson and Jake Paul suggests Netflix’s big bet on live sports will pay off, one bull said on Wednesday.
Pivotal Research Group analyst Jeffrey Wlodarczak raised his price target for the streaming service’s stock to $1,100, up from $925 previously. The target, which is the highest on the Street, implies shares could climb 26% from their current levels.
Netflix stock climbed 2.9% to hit a fresh all-time high on Tuesday, after the streamer said its broadcast of the fight between Tyson and Paul had drawn in 108 million global viewers.
The shares gained again in morning trading on Wednesday.
Wlodarczak said in a note that investors ought to put the bout down as a “successful learning experience” for the streamer given that some users reported technical glitches. The success of the fight should pave the way for the company to ramp up its coverage of sports and other live events that will give it “lower subscriber churn and greater ability to take price,” he added.
More sports are coming for Netflix users. The streaming company is set to air two NFL games on Christmas Day, and from January will start broadcasting a weekly WWE Monday Night Raw wrestling show.
As of Sept. 30, Netflix had about $7 billion in cash and it should dip into its pockets to snap up more sports rights, according to Wlodarczak. He pointed to WWE and UFC parent TKO Group and international racing series Formula 1 Group as two stocks that could benefit from a spending blitz.
The more content Netflix can add to its platform, the more it can press its advantages over its streaming rivals and “keep the subscriber flywheel going,” he said.
As of Tuesday’s close, Netflix shares were up 79% in 2024 amid a broader tech rally. The benchmark S&P 500 index has risen 24% this year.
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