Wall Street analysts have expressed confidence in Netflix’s ability to recover from its stock market slump thanks to the streaming service’s upcoming ad-supported tier.
Citigroup bank raised its price target for Netflix shares from $275 to $305 with Citigroup analyst Jason Bazinet estimating a significant rise in subscribers for the streaming platform. “Netflix doesn’t have a natural shareholder base. It’s not adding subs, so it’s not a growth stock. It doesn’t have a lot of cash flow, so it’s not a value stock…[But] if 65 million new customers sign up, we could go back into growth mode,” Bazinet observed.
Oppenheimer analyst Jason Helfstein agreed with Bazinet’s sentiment, adding that Netflix is able to control the timing of series launches and can use this to command premium ad costs from top-tier advertisers. Helfstein has set a target cost of $325 per share, based on his expectation for Netflix to generate $4.6 billion by 2025. This would see Netflix boost its total revenue to $42.4 billion with 282 million subscribers.
Since the streaming giant’s stock market struggles in May, Netflix’s shares have gained 40%, however, this is still 60% down from the start of the year.