Netflix stock was on the rise more than 6% Thursday morning, following a double upgrade from “Sell” to “Buy” courtesy of analyst firm CFRA, which shifted its target price for the stock from $225 to $310 per share.
The whopping $85 increase was explained in a Wednesday research note from CFRA’s Kenneth Leon, who wrote: “Besides NFLX’s best-in-class platform for ease in search and personalization, we expect new original content like ‘Emily in Paris,’ ‘Glass Onion’, and ‘Blood Origin’ to benefit subscription and reduce churn. We agree that NFLX does not need a major sports event or sponsor, which risks a big loss leader. We think it will be difficult for competitors to catch NFLX, one of the few profitable streaming providers with global scale.”
In addition to the appeal of Netflix’s new holiday releases, including “Emily in Paris” Season 3 and Rian Johnson’s “Knives Out” sequel “Glass Onion,” Leon cited the company’s recently launched ad-supported tier and continued efforts to crack down on password sharing as upcoming catalysts for new revenue streams.
After closing at $276.88 per share on Wednesday, shares of Netflix stock were trading at $295 at the time of publication Thursday.
Along with the double upgrade on Netflix shares, CFRA has applied a wider risk premium for the streamer. The firm kept its EPS estimates for Netflix at $10.35 in 2022 and $10.95 in 2023.
Following a rough year for Netflix — and most other media stocks — this marks the second mega upgrade in as many months for the streamer, which got a valuation boost from Wells Fargo equity analyst Steven Cahall on Dec. 9 from $300 per share to $400.
Netflix will report its fourth-quarter 2022 and full-year earnings results on Jan. 19, kicking off the first quarterly earnings of the new year.