Netflix shares gain the most in 18 weeks on Friday, SunTrust upgrades the stock to “Buy” on third-quarter subscriber outlook

SunTrust was reported to have revised up its rating on Netflix Inc (NFLX) to “Buy” from “Hold” previously, as it cited positive subscriber outlook for the third quarter, based on its web search trend analysis. At the same time, the firm revised down its price target on the stock to $410 from $415 previously.

Netflix shares closed higher for the fourth time in the past eleven trading sessions on NASDAQ on Friday. It has also been the sharpest daily surge since April 17th. The stock went up 5.79% ($19.65) to $358.82, after touching an intraday high at $359.15, or a price level not seen since July 27th ($367.00).

Shares of Netflix Inc have risen 86.92% so far in 2018 compared with a 7.52% gain for the underlying index, S&P 500 (SPX).

In 2017, Netflix Inc’s stock surged 55.06%, thus, it again outperformed the S&P 500, which registered a 19.42% return.

“The stock pullback post the 2Q subs miss (which we attribute to 13 Reasons Why and World Cup, as previewed) leaves us with ~20% potential upside from current levels,” SunTrust analyst Matthew Thornton wrote in a client note, cited by CNBC.

“More important, our India study shows NFLX initial original series resonating quite well with interest in NFLX rising (including relative to competitors) into more originals coming,” Thornton noted.

According to SunTrusts analysis of web search trends, about 5 million more international subscribers may be added by Netflix during the current quarter. That compares with a consensus estimate of 4.5 million new subscribers.

According to CNN Money, the 43 analysts, offering 12-month forecasts regarding Netflix Inc’s stock price, have a median target of $385.00, with a high estimate of $494.00 and a low estimate of $120.00. The median estimate represents a 7.30% upside compared to the closing price of $358.82 on August 24th.

The same media also reported that 23 out of 45 surveyed investment analysts had rated Netflix Inc’s stock as “Buy”, while 14 – as “Hold”. On the other hand, 4 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, Mondays levels of importance for the Netflix stock are presented as follows:

R1 – $360.16
R2 – $361.50
R3 (Range Resistance – Sell) – $362.84
R4 (Long Breakout) – $366.86
R5 (Breakout Target 1) – $371.55
R6 (Breakout Target 2) – $374.04

S1 – $357.48
S2 – $356.14
S3 (Range Support – Buy) – $354.80
S4 (Short Breakout) – $350.78
S5 (Breakout Target 1) – $346.09
S6 (Breakout Target 2) – $343.60

By using the traditional method of calculation, the weekly levels of importance for Netflix Inc (NFLX) are presented as follows:

Central Pivot Point – $342.97
R1 – $375.00
R2 – $391.19
R3 – $423.22
R4 – $455.26

S1 – $326.78
S2 – $294.75
S3 – $278.56
S4 – $262.38