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MoffettNathanson lifted its rating on the streaming giant to buy, from neutral, after its analysts recently argued gains from turning password-borrowers into paying customers had run its course.
By Etan Vlessing
Canada Bureau Chief
Shares in Netflix rose Monday after Wall Street analysts MoffettNathanson lifted its rating to buy, from neutral, and set a $1,100 price target.
MoffettNathanson’s Robert Fishman in a March 17 investor note cited Netflix’s efforts to boost earnings from advertising as grounds for optimism. “We are now at another unique moment in Netflix’s history with the company starting to gain scale in advertising, which should unlock a new runway of growth in the business for years to come,” the analyst argued.
Stock in Netflix rose $36.75, or around 4 percent, to $954.75 during brisk mid-morning trading on Monday. Fishman writing about a “new runway of growth” followed the analyst earlier in March moving Netflix shares to the downside by writing in a March 6 investment note that the streaming giant turning password-borrowers into paying subscribers for revenue growth had possibly run its course.
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In his latest note, a bullish Fishman with a wider lens argued continued growth in subscription revenues and increased advertising revenues should drive overall profit growth going forward. “There’s lots of runway ahead. Netflix will incur some incremental costs as it builds out its in-house advertising apparatus and we expect the company to continue to increase content spending,” he wrote of the streamer being able to drive increased earnings from its subscriber base.
MoffettNathanson forecast Netflix generating over $6 billion in advertising revenue in 2027 and almost $10 billion by 2030. That focus on advertising revenue over subscriber growth is in line with Netflix no longer reporting quarterly customer numbers at the beginning of 2025 to focus on revenue and profit growth.
Fishman reiterated future revenue growth for Netflix may come in the wake of the streaming giant announcing its first price hikes in two years, including a price increase to its advertising-supported tier, and the streaming giant continuing to expand its advertising business.
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