Netflix’s impressive performance in the fourth quarter has caught the attention of Wolfe Research, leading to an optimistic view on its stock. Analyst Peter Supino has upgraded Netflix from “peer perform” to “outperform” following the company’s announcement of quarterly results that surpassed expectations, and an impressive milestone of over 300 million paid memberships. Supino has set a price target of $1,100 per share, signaling a potential 15.3% increase from Wednesday’s closing price.
In his report, Supino acknowledges that while Netflix’s premium valuation can be a concern for some, his in-depth valuation analysis highlights the rare and valuable nature of Netflix’s growth, scalability, and profitability in today’s market. He also points out that, among its competitors, Netflix stands out for its remarkable reach and user engagement when it comes to monetizing content.
Although Supino mentions that Netflix is likely to see slower sales growth in the upcoming two years, he is confident that the company’s diverse growth strategies will contribute to a more manageable slowdown. “With increasing returns on capital and exceptional unit economics, it may be a very long time until Netflix hits a terminal growth rate,” Supino remarked.
Following Netflix’s robust fourth-quarter results, the company’s shares surged more than 9% on Wednesday, marking their most successful day since October 18. Over the past year, the stock has experienced a remarkable upswing, increasing by more than 93%.
The general sentiment among analysts towards Netflix is positive, with 32 out of 48 analysts rating the stock as either a buy or strong buy, according to data from LSEG.
