JPMorgan addresses areas of Netflix investor pushback

JPMorgan remains remain positive on Netflix shares, but says areas of investor pushback include paid sharing monetization and magnitude of uplift to revenue, core subscriber growth and the company’s future pricing power, and the quality and trajectory of its free cash flow in 2023 and 2024. Paid sharing monetization is coming a bit slower than JPMorgan expected, with only modest revenue acceleration in Q3, as Netflix is balancing enforcement with ensuring legitimate use cases are not disrupted, the analyst tells investors in a research note. The firm believes Netflix should continue to convert from the bigger pool of potential subscribers in 2024 and even 2025. It also does not believe a meaningful portion of the company’s free cash flow will be driven by the ongoing Hollywood strikes or restructured content deals. JPMorgan keeps an Overweight rating on the shares with a $505 price target.