Netflix shares see their biggest jump in four years

Netflix shares rallied a whopping 15% Wednesday to trade briefly at an all-time high, a day after the company revealed in its Q4 2020 earnings report that it was considering share buybacks, passing more than 200 million subscribers for the first time.

It’s the biggest jump since the company’s stock rose 19% on October 18, 2016.

“We’ve gone from a historic bear on NFLX to a bull with cards,” Wells Fargo analysts said in a note to customers Wednesday. The company also increased its target price from $ 510 to $ 700 per share. At least 15 other companies also raised their price targets.

The video streaming giant said it expects to see positive cash flow after 2021, helping to defend the analyst bull case.

“We remain supportive of the NFLX story as NFLX provides consumers with an increasingly engaging unique entertainment experience on virtually any device, with no commercials at a still relatively low cost,” Pivotal Research Group analysts said in a note Wednesday.

Netflix has benefited from the stay-at-home boom as the pandemic has made millions of people need daily entertainment in the comfort of their homes. That probably contributed to the number of paid subscribers rising to more than 200 million for the first time. It reached 100 million subscribers in 2017.

Netflix’s growth also comes as the streaming wars continue to intensify, with competition from Apple TV +, Discovery +, Disney +, HBO Max from AT & T’s WarnerMedia and Peacock from CNBC parent company NBCUniversal. ViacomCBS ‘Paramount + will be launched in March.

“We continue to believe that the bear case of competition that hinders NFLX’s long-term success is overblown,” Jefferies analysts said Tuesday. “Some competitors will succeed, others won’t, but the big picture is that there will be multiple winners within the OTT streaming space, and we expect NFLX to remain at the top of the food chain.”

Disclosure: NBCUniversal is CNBC’s parent company.