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Netflix stock surges past $200 for first time

  • Netflix shares hit an all-time high Friday, briefly passing through $200 for the first time ever.
  • Earlier Friday, Goldman Sachs and JPMorgan raised their price targets for the video streaming giant.

Netflix shares hit an all-time high Friday, briefly passing through $200 for the first time ever, an incredible milestone for a video streaming company upending the traditional media industry.

The catalyst for the most recent surge was multiple top analysts on Wall Street raising their price forecasts for the company this week. But this year's gains have been about the over-the-top leader growing subscribers at an incredible pace.

Goldman Sachs reaffirmed its buy rating Friday and raised its price target for Netflix shares to $235, highest on Wall Street. It predicted the company will post subscriber gains above expectations for the next two quarters.

"We believe consensus subscriber estimates for Netflix ahead of Monday's earnings remain too low, particularly for the quarter, 4Q, and beyond," analyst Heath Terry wrote in a note to clients.

JPMorgan also reiterated its overweight rating Friday and raised its price target for Netflix shares to $225 from $210 Friday.

After jumping as much as 2.5 percent to $200.82, the stock pulled back slightly to $198.75 a share. The company is slated to report third quarter earnings on Monday.

Netflix hit a number of impressive subscriber milestones this year. In April, it reached 100 million total subscribers just three years after surpassing 50 million. It also revealed in July it now has more than 50 million subscribers in the U.S. and international markets.

The company's shares have outperformed the market and other media names. Netflix stock is up more than 60 percent for the year through Friday morning compared with Disney shares' decline of 7 percent, Time Warner's 5 percent gain, CBS stock's 11 percent drop and the S&P 500's 14 percent return.

Netflix announced last week it is raising prices for some of its subscription plans. Its $10 per month high-definition plan now costs $11 per month. Netflix's 4K streaming plan, which enables higher resolution video streaming, will cost $14 per month, up from $12 per month.

Bernstein reiterated its outperform rating on the company's shares on Thursday, predicting Netflix will thrive from its recent price increases without any big detrimental effects.

"Looking at the history of past Netflix price increases, the impact on the pace of net sub additions has not been severe, and has been decidedly temporary — and we believe the Netflix service is even stronger and more entrenched now," analyst Todd Juenger wrote in a note to clients. "We believe this price increase, sooner than expected, shows Netflix management has reason to be confident in their sub trajectory and price inelasticity."

Netflix has raised prices for new subscribers at a 10 percent per year rate since 2014, the analyst noted, and still has been able to increase its U.S. subscriber base to more than 50 million from 34 million.