Sarina Trangle
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Jefferies raised its price target for Netflix stock to $1,400, which implies a 15% return from where shares closed Tuesday and is well above Visible Alpha's consensus price target.
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Netflix is expected to benefit from a lineup of strong releases, future price increases, and improving ad revenue, analysts said.
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They estimate Netflix may bring in as much as $10 billion in ad revenue through 2030.
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Netflix shares hit a record high during Tuesday's session before closing fractionally lower.
There’s a lot for investors to tune into at Netflix, Jefferies said.
Jefferies reiterated its “buy” rating of Netflix (NFLX) stock Tuesday, saying a solid release lineup, additional price increases and ad revenue are likely to bolster shares.
Analysts raised their price target to $1,400, about 15% above its current level. Jefferies' target is well above the average analyst price target of $1,192 compiled by Visible Alpha that implies a roughly 2% loss. The stock hit an all-time intraday high of around $1,230 on Tuesday before closing the session down fractionally at just below $1,218.
“We continue to see a favorable catalyst path for NFLX over the short, medium, and long-term,” Jefferies said, adding: “Over the next 5 yrs, we believe NFLX should sustain 20%+ EPS."
Netflix will likely be able to retain customers in 2025 while cracking down on password sharing and collecting recently raised subscription fees, thanks to “one of the best” release lineups in recent memory, Jefferies said. Anticipated releases include new episodes of Squid Game, Stranger Things and Wednesday, the research note said.
Ad revenue is poised to grow in the coming year, and potentially create a “$10B opportunity through 2030,” Jefferies said.
Netflix may also benefit from expanding live sports and entertainment offerings and future subscription fee increases, the note said.
Netflix shares have gained nearly 37% so far this year, while the benchmark S&P 500 index has added less than 2% over that period.
UPDATE: This article has been updated to include recent share price information.
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