Argus Research has upgraded the streaming giant to “buy” from “hold”.
The shares of Netflix Inc (NASDAQ: NFLX) are up 3.1% to $ 539.14 this morning after Argus Research updated the FAANG name from “Hold” to “Buy” and set a price target of $ 650. The analyst in question said Netflix has a competitive advantage as it is able to produce popular original content while expanding globally. Additionally, the broker added that last month’s tech sell-off created a suitable entry point for investors.
In the past few weeks, Netflix stock has cooled from a record high of $ 593.28 on Jan. 20. However, today’s pop helped security break the overhead pressures at $ 530, with the assistance of the 200-day moving average. NFLX is 48.9% year-over-year.
The analysts were already very optimistic about today’s security. Twenty-one of the 28 companies in question were rated “buy” or better, while seven rated it lukewarm “hold” or worse. Additionally, the 12 month consensus target of $ 619.43 represents a premium of 15.4% over current levels.
Additional tailwind could come from shifting the option pits where puts are popular. This corresponds to NFLX’s 50-day put / call volume ratio of 0.68 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX), which is more than 88% make up the measured values in their annual range. In other words, while calls still exceed the number of puts on an absolute basis, puts are being answered faster than usual.
That shift seems to be happening already today. To date, 39,000 calls have crossed the band, three times the intraday average and almost four times the number of puts traded. The most popular is the weekly 3/26 540 strike call, followed by the 535 strike call in the same series, which opens news positions in both places. Buyers of these options expect more upside for NFLX by the end of the week, when the contracts expire.
Now may be a good time to take the next step in Netflix stock options. The Schaeffer volatility index (SVI) of the security of 30% is over 2% of the measured values of the previous year. This suggests that players are currently pricing in relatively low volatility expectations.