JPMorgan Remains Bullish on Netflix, Raised Price Target

JPMorgan analysts increased their price target on Netflix (NASDAQ:NFLX) from $480.00 to $510.00, maintaining an Overweight rating. The analysts observed that following the third-quarter earnings report, Netflix's stock has returned to the levels it achieved around the time of their September investor conference, leading them to maintain a positive outlook on the company's future prospects.

The analysts at JPMorgan attribute their positive outlook on Netflix to several key factors: the company's potential to accelerate revenue growth in 2024, its capacity to expand profit margins, and the ability to drive growth in free cash flow over multiple years. They also point to the introduction of Paid Sharing as a significant contributor to Netflix's recent success, noting that it has led to two consecutive quarters of substantial subscriber growth, with expectations for this trend to persist.

However, the analysts anticipate that the company will shift its focus to expanding the scale of its advertisement-supported tier. This expansion is expected to involve adjustments to plans and pricing, bundles with internet service providers and devices, and strategic marketing. Netflix plans targeted price increases in the US, UK, and France in the fourth quarter, with intentions to extend these efforts to other markets in 2024, returning to a regular pricing cadence.