Goldman raises Netflix price target, predicts subscriber growth will top the Street next week

In this photo illustration the Netflix logo is seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
Rafael Henrique | SOPA Images | Getty Images

Goldman Sachs raised its price target on Netflix to $450 per share from $400 per share, anticipating strong results this year.

Goldman's new price target implies more than 32% upside for the streaming company, which closed at $338.92 per share on Monday.

Thanks to Netflix's highly anticipated movies and shows in the fourth quarter, Goldman is expecting the streaming platform to report 9.7 million paid subscriber additions in the fourth quarter, well above guidance of 7.6 million.

"While the stock has outperformed the broader market since 3Q results as investor expectations have largely converged toward company guidance, we continue to believe Netflix will exceed that guidance and consensus expectations for the year ahead, driving more share price outperformance," Goldman Sachs senior equity analyst Heath Terry said in a note to clients on Tuesday.

Shares of Netflix have soared nearly 20% since reporting third quarter earnings in October of 2019, about double the return of the S&P 500 is the same period of time. Terry said Netflix's strong content and "highest quality Original release slate to date" drove the share outperformance. This rally was all despite the lingering impact of last year's price increases and high profile competitive launches, like AppleTV+ and Disney+, Terry added.