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Wall Street’s consensus rating on Netflix (NFLX) stock has moved to buy from hold ahead of the internet television network’s fourth-quarter earnings report next week.
According to FactSet, 51% of analysts who cover Netflix now have a positive rating on it, vs. 49% a month ago. Of the rest, 42% rate it as hold while 7% have an underweight, or sell, rating.
Jefferies analyst Andrew Uerkwitz pushed Netflix stock into the positive zone when he upgraded the stock to buy from hold on Thursday. He also raised his price target to 385 from 310.
On the stock market today, Netflix stock rose 0.8% to close at 332.82.
Netflix plans to reveal its fourth-quarter results late Thursday. Analysts polled by FactSet expect the subscription streaming video giant to add 4.6 million paid subscribers in the December quarter for a total of 227.6 million worldwide.
Popular content on Netflix during the period included “Wednesday,” “Harry & Meghan,” “Dahmer” and “Glass Onion.”
Wall Street predicts Netflix will earn 58 cents a share on revenue of $7.84 billion. That would translate to a year-over-year decline of 56% in earnings and an increase of 2% in sales.
Netflix should get a boost this year from its advertising-subsidized service level and efforts to crack down on account sharing, Uerkwitz said.
“AVOD (ad-supported video on demand) will be slow to kick in, but when it does (paired with password-sharing changes), it should drive top-line outperformance,” he said in a note to clients. Improving operating margins in 2024 will be an even “bigger kicker” for Netflix stock, he said.
Oppenheimer analyst Jason Helfstein on Thursday reiterated his outperform rating on Netflix stock. He also raised his price target to 400 from 365.
Helfstein said he is bullish on Netflix ahead of the company’s fourth-quarter earnings report.
“Besides subscriber metrics, (Netflix) stock will likely react to comments surrounding progress of ad tier and new initiatives to reduce password sharing,” he said in a note to clients.
On Friday, BofA Securities analyst Jessica Reif Ehrlich named Netflix stock and rival Warner Bros. Discovery (WBD) as her top picks in the media sector. She has a price objective of 370 on Netflix stock.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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