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Netflix’s (NASDAQ: NFLX) catalyst path for 2023 is positive, Wells Fargo analyst Steven Cahall wrote in the upgrade note today. The analyst lifted the rating on the video streaming titan to Overweight from Equal Weight with a price target of $400 per share (up from $300).
The analyst sees potential for the KPIs to exceed next year as content is “clearly improving.” Moreover, the detailed AVOD analysis yielded bullish signals, leaving Cahall’s new estimates above the Street for 2025.
“We think the pull-forward from COVID is now mostly digested, with global connectivity still providing a long-term tailwind of ~+8mm net adds annually before any penetration increase. We see churn improving in '23 due to content + AVOD + paid sharing, and 10bps of churn = ~10mm subs. So, we feel better on subs, while ads drive us ahead on revenues,” Cahall said in a client note.
Moreover, Cowen analyst John Blackedge named Netflix a Best Large-Cap Idea for 2023 and raised the price target to $405 per share from the prior $340.
“The key drivers for NFLX's shares in '23 are (i) New monetization levers, including the new lower price ad tier (which could drive accelerating net member adds) and the paid sharing solution launching globally in '23; (ii) Revenue re-accelerating in 2H23; and (iii) FCF growth ramping,” Blackedge explained in a note.
Netflix shares are trading almost 3% higher in pre-market Friday.
By Senad Karaahmetovic
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments, Hot List, Hot Upgrades, Upgrades
Related EntitiesCowen & Co, Wells Fargo, Senad Karaahmetovic
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