Netflix’s return to growth in the third quarter has prompted Pivotal Research Group analyst Jeffrey Wlodarczak reversing his stock rating for the streaming giant from “sell” to “buy.”
In an Oct. 26 investor note, the bullish analyst also reset his 2023 net new subscriber forecast from 5.5 million to 15 million, “driven primarily by what we believe will be success at converting a material number of effective pirates into paying subscribers or higher ARPU and to a lesser extent the short term subscriber benefits of launching an ad supported service.”
He echoed other Wall Street analysts who see a pivot upwards as Netflix launches an ad-supported subscription tier and curbs password sharing, with an eye to potentially driving up subscriber growth and overall revenues.
On Wednesday, in early afternoon trading, shares in Netflix rose $9.60, or around 3.3 percent, to $300.10 in value.
As Wlodarczak raised his stock price target to $375, he also argued Netflix’s stock “appears to be a relatively attractive place for investors to be amidst major slowdowns in digital advertising.” YouTube was the latest tech and social media platform to be impacted by a declining digital ad market when Google released its latest financial results on Tuesday.
And the Pivotal Research Group analyst also predicted Netflix CEO Reed Hastings will look to sell company, most likely to Microsoft, in 2024, in time to receive regulatory approval a year later from a potentially new administration in Washington, D.C.