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Oppenheimer analysts reaffirmed an Outperform rating and a $415 per share price target in Netflix (NASDAQ:NFLX).
The analysts’ price target implies a 40% upside potential after shares corrected over 20% since the February high. They believe the pullback is a result of “fears around higher churn from enforcing password sharing and slower ad launch.”
“We think the stock is attractive at current levels,” the analysts said in a note sent to clients.
“We believe nothing has changed from our original thesis: advertising increases the TAM, content competition is easing, and paid account sharing will be a long-term tailwind.”
The analysts see $2-8 billion in revenue upside opportunity from the account sharing. He also weighed in on the competition.
“Competitors appear more focused on profitability, suggesting we are past peak competition, as evidenced by NFLX’s second highest streaming net adds in 4Q, recent increased content spend efficiency, and 4Q mgmt. comments around lower churn,” the analysts added.
Netflix shares are down 1.2% in pre-market Wednesday after closing at $294.94 yesterday.
