Netflix Stock Jumps 4.8% in Morning Trading

Tiger Newspress2022-09-28

An Atlantic Equities analyst upgraded Netflix shares to Overweight as he believes the revenue opportunity from the upcoming ad-supported tier isn’t reflected in the price. Netflix stock jumps 4.8% in morning trading.

The analyst sees Netflix being in a position to generate revenues of $8 billion in 2025, which could potentially account for up to 20% of total revenues at that point.

“Some subscribers will downgrade to the cheaper ad-supported tier, but we believe Netflix's high viewership means any "downgrade" will be extremely accretive to overall ARPU due to high ad rates. We now estimate Netflix's US ARPU could almost double over the next three years,” the analyst explained in a client note.

The new rating also reflects raised 2024 EPS estimates, which now sit at $14.14 (up from $12.71), while 2025 estimates are also hiked. The new price target of $283 implies a 26% upside potential from current levels.

This marks the fourth upgrade for Netflix this month after Oppenheimer, Evercore ISI, and Macquarie all moved a step higher on their respective rating scale.

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Comments

bshian
2022-09-29
bshian
Ok
ChaiKC
2022-09-29
ChaiKC
Good!
- AndrewL:
  👍
andrew123
2022-09-29
andrew123
Wow
james_l
2022-09-29
james_l
Wow

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