Macquarie and Guggenheim raised their price targets for Netflix (NASDAQ:) in notes on Tuesday, ahead of the company’s April 18 earnings release.
Guggenheim lifted its Netflix target to $700 from $600, maintaining a Buy rating on the stock. The firm said investor confidence heading into the streaming giant’s earnings is high.
Buyside net member add expectations for 1Q are at 8 million versus Guggenheim’s revised 6.8 million and the Visible Alpha consensus of 4.8 million.
The firm’s data indicates incremental download strength in UCAN and sequential slowing in other international regions. However, they see uncertainty regarding the relative pace of core member growth and the likely non-recurring impact of an initial contribution from the implementation of paid-sharing policies.
Nevertheless, Guggenheim believes “Netflix continues to have significant runway for sustained global membership growth.”
Macquarie raised its price target for Netflix to $685 from $595, keeping an Outperform rating on the stock. The firm said Netflix’s password-sharing crackdown on the heels of its ad tier launch helped drive nearly 30 million subscription adds in FY23.
“Management had previously estimated that over 100m users share their passwords, illustrating that this initiative still has room to run in 2024E,” wrote the firm. “Investor attention should also shift toward avg revenue per member: Netflix’s ARM rose only 2.5% in UCAN last quarter and was flat overall — but we expect ARM growth can pick up in 2024E on potential price increases and further monetization from its advertising tier.”
Overall, Macquarie considers Netflix the “undisputed leader” in streaming TV.
