Morgan Stanley analyst Benjamin Swinburne maintains $Netflix (NFLX.US)$ with a buy rating, and adjusts the target price from $780 to $820.
According to TipRanks data, the analyst has a success rate of 61.0% and a total average return of 12.1% over the past year.
Furthermore, according to the comprehensive report, the opinions of $Netflix (NFLX.US)$'s main analysts recently are as follows:
The 'new normal' in Hollywood appears to benefit Netflix, with less intense competition for content and studios being more amenable to licensing. The introduction of an advertising tier is seen as a potential way to further maximize revenues, possibly expanding the total addressable market rather than just enhancing average revenue per member. Projections for Q3 net additions are estimated at 4 to 4.5 million, which may be on the lower side, with expectations of 8 to 9 million for Q4.
Netflix is viewed as a robust growth narrative with substantial potential for increased revenue, earnings, and free cash flow in the coming years. Nevertheless, there's an assessment that the stock's current valuation may not allow for further multiple expansion and might actually shrink as growth decelerates approaching 2025, owing to a diminishing temporary boost in net additions from paid sharing. It's believed that Netflix continued to experience an uptick in subscriber numbers due to paid sharing in the third quarter, though the temporary advantages of this are expected to taper off. The estimate for third-quarter net additions was raised based on these expectations.
With the stock up 13% since the second quarter results, which was bolstered by positive subscriber data from third parties, it is anticipated that Netflix will need to deliver robust results and forecasts, in addition to announcing a price hike, to maintain momentum. Previously, a hike in the Premium tier price was introduced in various regions including the U.S., U.K., and France. It is now projected that there will be an increase in the Premium tier's pricing in other regions as well, with a significant 8%-15% rise expected for the Standard plan. Since there has been no Standard price increase since January 2022, the current pricing stands at a narrow 4% premium compared to peers, significantly lower than the 53% recorded previously. Additionally, the strong viewership in the third quarter and an impressive content lineup for the fourth quarter, featuring NFL, are likely to further mitigate the risk of subscriber churn.
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