UBS raised its price target for streaming giant Netflix (NASDAQ:NFLX) to $560 from $500 per share in a note Thursday, maintaining a Buy rating on the stock.
Analysts at the bank are looking for Netflix to report accelerating revenue and operating income growth in the fourth quarter and 2024.
"We believe Netflix is the main beneficiary as the industry increases prices, consolidates platforms, cuts spend & renews focus on licensing, likely driving upside to estimates & the multiple," they wrote.
"We expect 4Q results to be largely in-line, incl. similar sub adds (UBSe 9.0M vs. 8.8M in 3Q; 7.7M a yr ago) and accelerating rev/OI growth (+11%; UBSe OI $1.2B vs. 550M a yr ago)," they added. "We expect 1Q guidance to point to continued acceleration (UBSe 14%/28% rev/OI growth) while subs are seasonally softer but better yoy (UBSe +3.8M vs. street 4.0M; 1.8M in 1Q22)."
The analysts also said that paid sharing and a return to price increases should drive average revenue per membership in 2024, with the rollout of paid sharing expected to continue into the first quarter.