Netflix (NASDAQ:NFLX) is soaring again today, up 4.4% and breaking the $300 per share level for the first time since a post-earnings collapse in April, despite a Nasdaq index weighted down by stock tumbles at Alphabet and Microsoft.
In addition to closing above its 200-day moving average on Friday for the first time since January, Netflix stock is up more than 31% over the last month, driven mainly by an easy earnings beat on October 18.
Analyst Jeffrey Wlodarczak of Pivotal Research said, “we clearly carried our Sell rating far too long and believe that the move higher in the shares post-earnings is likely to continue,” justifying the firm’s decision to upgrade Netflix stock from a Sell to a Buy and to set a Street-high price target of $375.
He gives several reasons, including an increase from 5.5% to 15% in the predicted number of net subscribers added in 2023. (and now above the consensus of 12.5M).
This is due to “what we hope will be a success at converting a meaningful number of effective pirates into paying subscribers or better ARPU and to a lesser degree the near term subscriber advantages of launching an ad-supported service,” as stated by Wlodarczak.
He also believes that investors would be wise to put their money into Netflix stock since the firm should be able to expand its relatively meager ad-supported tier regardless of the economic climate.
However, in a downturn, he worries that customers would switch to the cheaper advertising plan, which won’t be a problem until the second half of 2023 at the earliest.
Wlodarczak says, “We continue to expect that (co-CEO Reed) Hastings would attempt to sell Netflix stock (to most likely MSFT) as early as ’24 (with regulatory permission in ’25 under a probable new administration),” which is an exciting development in the realm of merger and acquisition rumors.
The new $375 price target on Netflix stock set by Pivotal represents a potential increase of 24%.
Although Monster: The Jeffrey Dahmer Story, Netflix’s newest blockbuster success, has supplanted Netflix (NFLX) as the top streaming-usage stakeholder in Nielsen’s assessment, Netflix is still leading time streamed.
The rise in Netflix stock continues as Pivotal upgrades to Buy and sets a new target at the Street-high level.
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