It's not unusual for analysts to tweak their evaluations of publicly traded companies in the days before they report earnings. So it was with Netflix (NFLX 9.72%), which saw several adjustments from pundits following the bellwether video streaming company. It's set to unveil first-quarter earnings this coming Thursday after market close.
A prognosticator at one of the more influential white-shoe investment banks substantially raised his price target on Netflix, a move that certainly attracted the attention of many Netflix investors. Here's a brief look at this new take on the stock.
A distinguished history and a future stuffed with opportunities
Less than a week before Netflix was to publish those quarterly figures, Morgan Stanley analyst Benjamin Swinburne made the move. He now feels Netflix stock is worth $700 per share, up quite some distance from his previous level of $600. He maintained his overweight (i.e., buy) recommendation on the shares.
Swinburne is encouraged by Netflix's history, noting in his latest research note that the company had adeptly pivoted several times in its history (most notably by morphing from what was essentially a DVD lending service into a streaming video giant).
The future looks ripe with potential, too, according to the analyst. Swinburne wrote that the company has several promising revenue streams in front of it. These include advertising, live sports broadcasts, and video games. He believes such opportunities could boost the company's per-share earnings by a compound annual growth rate (CAGR) of more than 25%.
NASDAQ: NFLX
Key Data Points
Continuing to bounce back
Netflix has been a roaring success since what was arguably its low point as a major entertainment company -- the two consecutive quarters in 2022 in which it reported declines in subscriber totals.
Since then, however, it's more than recovered from those hiccups, and has an ever-strengthening lineup of exclusive content. On top of that, as Swinburne pointed out, are those new(ish) and potentially very strong revenue sources it can tap. Given all that, his optimism on the stock feels justified.
