Investors should buy the recent dip in Netflix (NASDAQ: NFLX) shares due to its dominant position in the streaming video market, according to RBC Capital Markets.
The firm raised it price target for Netflix shares to $440 from $360, representing 29% upside to Wednesday's close. RBC also reiterated its outperform rating for the stock, citing positive results from the firm's recent consumer survey.
"We believe these results largely confirm Netflix's strong Value Prop and Competitive Position," analyst Mark Mahaney said in the note to clients Wednesday.
The stock dropped 6.2% on Wednesday after the shares failed to hold a key technical level and as part of a bigger selloff in technology shares.
A favorable report from Morgan Stanley on Apple's Netflix-competitor video service may have also contributed to the decline.
The analyst said the firm's recent survey of more than 1,500 U.S. consumers showed 68% of Netflix subscribers are either "extremely" or "very satisfied" with its service. It also revealed 57% of respondents use the service up from 53% in September's survey.
In its second-quarter financial results, the company said it added 5.15 million memberships, missing the Wall Street consensus of 6.34 million. Netflix shares are down 13% since the end of June because of that miss and the decline on Wednesday.
The shares began Thursday up $8.19, or 2.4%, to $349.37, within a 52-week trading range of $173.73 to $423.21.
