Netflix Stock Upgraded Ahead Of ‘Normalizing’ Subscriber Growth

With Netflix stock beaten down over slowing growth post-pandemic, one Wall Street analyst sees a buying opportunity in the streaming video leader.


Credit Suisse analyst Douglas Mitchelson on Friday upgraded Netflix stock to outperform from neutral. He set a 12-month price target of 586 on Netflix (NFLX).

On the stock market today, Netflix stock rose 1.7% to 527.07.

“We are upgrading Netflix from neutral to outperform as we expect subscriber growth to normalize in Q4 and our U.S. consumer survey reinforced the strong competitive position and high user satisfaction for the global SVOD (subscription video-on-demand) leader,” Mitchelson said in a note to clients.

Netflix Stock Is Consolidating

Netflix stock has tumbled since it hit a record high 593.29 on Jan. 20. The Los Gatos, Calif.-based company faces difficult year-over-year comparisons after its huge subscriber gains in early 2020 during the Covid-19 lockdowns.

Expectations are low for the company’s second-quarter earnings report, due July 20. Netflix said it expects to add 1 million new subscribers in the June quarter, vs. 10.09 million in the year-earlier period. Netflix ended the March quarter with 207.64 million streaming subscribers worldwide.

Netflix has a strong content release slate for the August-December period, Mitchelson said. And he expects a stronger lineup for 2022 than 2021, led by season four of hit series “Stranger Things” and season two of “Bridgerton.”

Netflix stock has been consolidating for the past 22 weeks with a buy point of 593.39, according to IBD MarketSmith charts.

In a positive sign, Netflix stock has risen above its 50-day and 200-day moving average lines after dwelling beneath them for weeks.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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