Market Commentary

Netflix Stock Rally Continues on Positive Outlook

Raza Akram
6 Feb 2024 · 2 minutes read

Netflix (NFLX:US) is one of the better-performing mega-cap stocks lately after Wall Street analysts weighed in positively on the company’s efforts to improve profitability and top-line growth.

Most recently, the rating firm Moody’s upgraded the recommendation on Netflix’s senior unsecured notes, citing a positive outlook. The broker expects Netflix will remain the leading direct-to-consumer (DTC)  subscription-video-on-demand SVOD single Tier-1 platform in the world.

Moreover, Moody’s sees improving fundamentals and expects further subscription growth. 

As a result, Netflix shares now trade about 15% higher year-to-date (YTD).

Moreover, CFRA analysts recently upgraded Netflix stock while their JPMorgan colleagues urged their clients to buy Netflix shares on any weakness.

Most recently, Wells Fargo analysts said NFLX stock could add at least 20% after conducting a deep-dive analysis into the company's paid sharing actions.

“While much has been written on AVOD, paid sharing is arguably the bigger near-term earnings opportunity given some 100mm global paid sharers incl. 30mm domestically… Significant upward revisions look likely,” Wells Fargo analysts said in a note.

The research firm’s blue-sky scenario sees NFLX shares potentially rallying to $560 per share.

“We continue to like the stock here and view the entry point as attractive despite the recent run. Q1 comments on paid sharing should be a catalyst,” the analysts concluded.

The recent run-up in stock comes after Rep. Michael McCaul was selling in February and last December to take advantage of around 70% rally from October to February. Similarly, Nancy Pelosi and her husband were also selling Netflix shares during the last days of 2022.

On the other hand, Congressman Josh Gottheimer was buying Netflix shares in January and February.