Piper Sandler analyst Yung Kim raised the firm's price target on Netflix (NFLX) to $534 from $500 and reiterates an Overweight rating on the shares following last night's Q2 results.
The stock in premarket trading is down 7%, or $38.39, to $489.
Netflix's subscriber net adds for Q2 beat consensus, driven by a stay at home policies amid COVID-19, and while its guidance for Q3 subnet adds is below expectations, COVID will likely impact results, Kim tells investors in a research note.
Subscriber growth did not translate to stronger earnings, due in part to currency headwinds offsetting savings on marketing and content expenses that drove operating margin to 22%, adds the analyst. Further, Kim notes Netflix's content slate for 2020 is expected without delays.
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