Netflix is currently in the midst of its own moment on Wall Street, with its recent success overshadowed by the tech rally. However, according to UBS analysts, the streaming service is expected to continue thriving as they predict a significant earnings beat next week.
Since January, Netflix (NFLX) shares have soared by 49%, fueled by the introduction of an advertising-supported tier and a crackdown on password sharing. As of Wednesday, the stock rose by 0.7% to reach $443.30.
If the UBS team, led by John Hodulik, is correct, these impressive gains are just the beginning. The analysts anticipate that Netflix will surpass its own guidance for second-quarter earnings and experience even greater growth in the next six months.
In a research note, Hodulik stated, “We are raising estimates following positive data on paid sharing. Checks on engagement, downloads & search interest were all constructive for the newly launched paid sharing markets.”
With their increased confidence in Netflix’s performance, the UBS analysts have raised their target price on the stock from $390 to $525, reiterating a Buy rating. They value the company at 23 times its expected earnings before interest, taxes, depreciation, and amortization in 2024.
Hodulik wrote, “We see Netflix as the main beneficiary as peers prioritize profits in streaming.”