Netflix (NASDAQ: NFLX) got an upgrade today ahead of its Q2 results later this month. Top-rated Goldman Sachs analyst Eric Sheridan upgraded the stock to a Hold from a Sell and raised the price target to $400 from $230, implying a 9.8% downside at current levels.
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The analyst noted that the stock is likely to continue its strong momentum well into next year and into 2025. Sheridan commented, “In short, NFLX [management] has executed its password sharing initiative in excess of our prior assumptions, has regained content creation momentum in a manner that has muted any post-pandemic growth headwinds and overall industry competition has become more muted (especially from traditional media companies) in the past six months.”
Sheridan was impressed with the “overall positive current operating performance” of the streaming giant and expects that in the second quarter, the company’s net subscriber additions could be well above estimates due to a “solid content” mix and its password crackdown policy. The analyst estimates that NFLX could generate earnings in the range of $22 to $27 per share in 2025 fueled by growth in its advertising tier, subscriber momentum, and password crackdown policy.
Analysts are cautiously optimistic about NFLX stock with a Moderate Buy consensus rating based on 19 Buys, 14 Holds, and two Sells.
