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Investing.com — Shares of Netflix Inc (NASDAQ:NFLX) fell over 1% Tuesday following the announcement of a price increase last week. Reuters reported Friday that the company has increased the monthly fee by $1 to $2 depending on the plan to help fund new programming.
Analysts have been largely positive on the news, with JPMorgan (NYSE:JPM)’s Doug Anmuth telling investors in a note that he believes the increase will drive an incremental $1 billion-plus of revenue in 2022. Anmuth added that each price increase “could drive a bit more friction.” However, he believes Netflix is willing to trade off a small amount of subscribers for incremental revenue.
BMO Capital analyst Daniel Salmon reiterated an 0utperform rating and a $700 price target on Netflix, explaining in his note to clients that “increases in the U.S., Canada and South Korea show continued pricing power.”
The analyst added that this supports the expanding free cash flow on which “more investors are focused after high-multiple businesses have been re-valued.”
Elsewhere, Piper Sandler, Wedbush and KeyBanc were all positive on the price hike.
However, Deutsche Bank lowered their price target on Netflix shares to $580 from $590, maintaining a Hold rating. While they did not cite the price change, Deutsche Bank said in its note that third-party data used to calculate the company’s Q4 net additions “has not been encouraging.”
