Internet television network Netflix (NFLX) saw its stock climb on Wednesday after signing a deal with hit producer Ryan Murphy to make original shows for the streaming service.
Murphy and his production team have entered into a multiyear deal to produce new series and films exclusively at Netflix starting July 1, Netflix said in a press release. Murphy is behind such critically acclaimed shows as “Nip/Tuck,” “Glee,” “American Horror Story” and “Feud.”
Murphy’s new original series, “Ratched” and “The Politician,” will premiere globally on Netflix.
The New York Times reported late Tuesday that Murphy had secured a five-year deal that could be worth as much as $300 million. Murphy’s current studio deal was with 21st Century Fox (FOXA). That contract expires this summer.
In August, Netflix poached producer Shonda Rhimes from Walt Disney (DIS)-owned ABC to make original shows with a reported $100 million deal. Rhimes is the creator of the popular ABC shows “Grey’s Anatomy” and “Scandal.”
Netflix stock was up 3.4%, near 267, in morning trading on the stock market today. It hit an all-time high of 286.81 on Jan. 29.
SunTrust Robinson Humphrey analyst Matthew Thornton raised his price target on Netflix to 270 from 175 based on the company’s strong fourth-quarter results. But he reiterated his hold rating on Netflix because of its current valuation.
Thornton noted such positive metrics as increased viewing hours by users and an expanded slate of original content for international markets. But the stock’s rich valuation and rising competition from Amazon (AMZN) and others raise caution flags, he said.
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