For Netflix (NASDAQ: NFLX) investors, this has been a slow year. The current trading price of the stock is the same as in July last year, and has been hovering within a narrow range of around 15% during this period. But as major indexes once again hit record highs, especially technological leadership, it seems that strong supply is starting to flow into the California-based streaming media giant’s stock. They have risen 10% in the past two weeks, and according to some of the loudest voices in the Bulls camp, they still have a long way to go.
Last Friday, Credit Suisse upgraded the rating of Netflix stock from “Neutral” to “Outperform”, while maintaining the target price at $586. This shows that you can get at least a 10% advantage at the current price, which will not put too much pressure on Netflix, so you can imagine that the Credit Suisse team will review this price target in the coming weeks.
Favorable risk/reward
The reason behind the update comes from a recent consumer survey conducted by Credit Suisse in the United States, which “reinforces Netflix’s strong competitive position and high user satisfaction.” Coupled with this positive market sentiment, Credit Suisse believes that these stocks appear to be cheap in the context of the current risk/return situation. They have recently rebounded from solid support near $480, which is where the bears have lost momentum many times in the past year, so I tend to think that this bullish trend will accelerate the pace.
For those of us who are on the sidelines and considering opening positions that looked like sleeping giants at first, this latest update comes from a series of positive comments, which bodes well for the coming months. In May, Jefferies began reporting on Netflix with a buy rating and a target price of $620. Compared with Credit Suisse, there is more meat on this bone, if Netflix’s stock price hits a record high and is about 20% higher than the current level.
Analyst Andrew Uerkwitz and his team believe that Netflix has been “separated as the mainstay and must have OTT services”, even if the actual content creators “pull IP content from left to right”, this benefits from the company’s original content push. Uerkwitz predicts that more than $100 billion will be spent on content in the next five years, which is a staggering number compared with the expected free cash flow of $17.5 billion and the $12 billion of Actions repurchases.
At about the same time, Melvin Capital Management reported a new position in Netflix stock, and Loop Capital reiterated its buy rating on the stock and a target price of $650. These moves came after Netflix released its first-quarter earnings report in late April, which shattered analysts’ expectations for revenue and earnings, but the number of subscribers was weak. But even with this less than expected guidance, Stifel’s Scott Devitt stated that “Netflix remains a top-of-the-line consumer technology company with a” compelling long-term growth story. ”
Weak Quarter After the quiet start to the second quarter, the tech industry has reawakened from its post-2020 nap and is showing signs of wanting to lead again at least in the second half of this year. Thomas Lee of Fundstrat Global Advisors recently spoke with FAANG Technology Group It has undergone a “double update,” and Netflix is a key component of it.
Lee believes that inflation concerns that plagued the tech industry in February and March have greatly diminished, and the tech industry should get rid of concerns about high-interest rates and returns. I have no intention of disappointing other FAANG members.
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