Netflix Inc (NFLX) shares moved higher Thursday after analysts at UBS boosted their price target and Bloomberg reported the streaming entertainment group could be moving into online video game sector.
Former Facebook (FB) executive Mike Verdu has been brought in to shepherd Netflix's drive into the streaming video game business, Bloomberg reported, with the new content likely to be placed amid the group's existing movie and television offerings as well as its newly-launched e-commerce platform Netflix.shop. Netflix hinted at the move earlier this month when it expanded its pact with the highly-acclaimed producer Shonda Rhimes.
UBS analyst Eric Sheridan, meanwhile, added $20 to his Netflix price target, taking it to $620 per share ahead of the group's second quarter earnings report on July 20.
Canaccord Genuity analyst Maria Ripps, who carries a 'buy' rating with a $650 price target on Netflix, said any push into the video game streaming market could enhance subscriber engagement and assist the group's broader second-half content push.
"Netflix’s existing IP and prior tests with interactive content create a solid foundation for an entertainment format that could diversify its subscriber base into a younger demographic," said Ripps.
"While Netflix is likely to take a cautious approach to any foray into gaming, the move could help the company drive subscriber acquisition and engagement with younger consumers given that 26% of Gen Z said playing video games was their favorite entertainment activity while just 10% prefer watching TV or movies at home," she added.
Netflix shares were marked 1.5% higher in early trading Thursday to change hands at $556.00 each, a move that would nudge the stock's year-to-date gain to around 3%.