Publish date:

Netflix Rises as Credit Suisse Sees Subscriber Growth Normalizing

Netflix was upgraded to outperform with a $586 price target at Credit Suisse, which expects subscriber growth to normalize.
Author:

Shares of Netflix  (NFLX) - Get Report were higher on Friday after the video-streaming service was upgraded to outperform from neutral by analysts at Credit Suisse.

The investment firm's analysts say they expect subscriber growth to normalize in the fourth quarter. A survey by the firm among U.S. customers reinforced the platform's competitive position and high user satisfaction, CS said.

Jon Markman on Real Money Picks Stocks for the Digital Future 

Analysts maintained their $586 price target while saying the stock is at a favorable entry point and attractive absolute valuation. 

The firm sees a strong August to December pipeline on releases with "numerous potential top-of-funnel titles," according to analyst Douglas Mitchelson. He also expects a stronger full-year slate in 2022 vs 2021. 

TST Recommends

Second-quarter results and third-quarter guidance are still uncertain and any disappointment could be a "clearing event" ahead of a rebound in the fourth quarter, according to Mitchelson. 

Shares of Netflix at last check were 1.7% higher $527.02.

Jim Cramer: Tech Is Back. Buy the Growth Stocks

Earlier this month, Netflix and Amblin Partners, the film and television studio led by Steven Spielberg, raised the curtain on a partnership. In the deal, the Hollywood director's company will produce multiple films a year for the Los Gatos, Calif., streaming giant.

Spielberg, the Oscar-winning director of "Schindler's List," "Jurassic Park" and "Saving Private Ryan," will continue to direct movies for Comcast's  (CMCSA) - Get Report Universal Pictures as part of a separate deal.

Earlier this month, Netflix launched Netflix.shop, which will sell curated products including apparel, toys and games.