Guggenheim analyst Michael Morris maintains $Netflix (NFLX.US)$ with a buy rating, and adjusts the target price from $735 to $810.
According to TipRanks data, the analyst has a success rate of 52.2% and a total average return of 13.4% over the past year.
Furthermore, according to the comprehensive report, the opinions of $Netflix (NFLX.US)$'s main analysts recently are as follows:
Netflix is perceived to benefit from Hollywood's 'new normal', with less intense competition for content and a renewed willingness among media company studios to license. The introduction of an advertising tier could provide Netflix with an additional method to increase revenues, potentially expanding the total addressable market more than enhancing average revenue per member. Projections for net additions remain at 4M-4.5M for Q3, which may be deemed conservative, and 8M-9M for Q4.
Netflix is perceived as a strong growth narrative with considerable potential for increased revenue, earnings, and free cash flow in the years to come. Nonetheless, the current valuation is viewed as limiting the prospects for further multiple expansion, with expectations of a contraction as growth moderates towards 2025. This anticipated slowdown is partly due to the diminishing short-term subscriber growth boost from paid sharing initiatives. The belief is that despite a significant rise in subscriber numbers due to paid sharing in Q3, this trend is expected to taper off. Consequently, the forecast for Q3 net additions has been revised upward.
The advertising market remains robust, with ad agencies demonstrating an average organic growth of 3% in Q3. This is anticipated to contribute to a slight uptick in linear TV ad revenues, albeit still on the decline when the Olympics are excluded. Long-term confidence in Netflix's advertising tier is likely to be bolstered by the inclusion of sports broadcasting and the possibility of subscription price hikes.
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