Oppenheimer reiterates bullish stance on Netflix’s ad tier driving sub growth

Oppenheimer analyst Jason Helfstein reiterates an Outperform rating and $365 target on Netflix (NFLX) in response to Digiday’s article indicating execution struggles with the new advertising tier. The analyst believes Netflix’s stock will be driven by subs, not revenue, and data on viewership are indicative of in-line or better subs. He is less concerned for four reasons, namely because still early in launch and not flooding number of ads; if true, $55 CPM is a bullish starting rate; advertisers want to move unspent funds to Q1; Microsoft (MSFT) likely has minimum guarantees, so it’s unlikely that Netflix will miss ad revenue in short-term. Netflix Top Ten data also indicate more hit releases as of Dec. 11 versus Q3 2022, Helfstein notes, adding that 3P data show Netflix churn remains well below industry average.