Benzinga -
- Morgan Stanley analyst Ben Swinburne reiterates an Equal-weight rating on Netflix Inc (NASDAQ: NFLX) with a $350 price target.
- The analyst highlights that NFLX is the streaming winner but priced as such, hence the re-rating.
- He thinks that paid sharing and ad-tier opportunities are significant but appear largely captured in expectations and valuation, creating a balanced share risk and reward in an April 11 note titled "Netflix Inc: The Diplomat - Remain EW."
- In his view, slower paid sharing rollout in 1Q may lead to net adds outperformance.
- All else equal, Swinburne thinks that this suggests an upside to 1Q net adds guidance and expectations.
- He notes that uncertainty around paid sharing timing creates a broader range of net adds outcomes than typical.
- The analyst writes that NFLX's premium multiple reflects the expectation for accelerating top-line growth in 2H23. To support and expand that multiple, he focused on Netflix's ability to leverage content costs to drive margins.
- With slowing cash content spend, he should have proof points around this opportunity later this year and in 2024.
- Price Action: NFLX shares traded higher by 4.31% at $345.29 on the last check Thursday.
- Photo by Stock Catalog via Flickr
| Mar 2022 | Wedbush | Upgrades | Underperform | Neutral |
| Jan 2022 | Citigroup | Upgrades | Neutral | Buy |
| Jan 2022 | Rosenblatt | Maintains | Neutral |
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