Netflix (NASDAQ: NFLX) stock has been trading upward since May 2022. Despite the stock gaining over 180% during this time, it failed to reach the highs of October 2021.
Wall Street analysts believe that Netflix stock can still go higher within the next 12 months mostly because of increasing subscribers as well as having an edge over competitors that are raising prices and reducing content spend.
The average analyst target price sees a 12% gain
Analyst consensus at TipRanks is a ‘moderate buy’ for the NFLX stock based on 34 analysts in the last three months. Their average price target is $468.81, 12.69% higher than the current price of $416.03.
On Friday, Loop Capital analyst, Alan Gould upgraded Netflix stock to ‘Buy’ from ‘Hold’ with a $500 price target. Gould wrote to clients that “The competition is simultaneously raising prices and reducing content spend which should further boost NFLX’s competitive position.”
What’s more, Gould believes that the recent strike by actors and screenwriters who demand better residual pay from streaming services and regulations on the use of artificial intelligence will accelerate the decline of the traditional TV business and benefit Netflix.
Piper Sandler analyst Matthew Farrell, on the other hand, reiterated his Hold rating with a price target of $440, which is only a 5% gain from the current price.
Netflix reported its Q2 earnings in July with revenue figures missing estimates, along with a weaker-than-expected forecast for revenue in the third quarter. However, the company reported the addition of 5.9 million new streaming customers from April through June, which shows the crackdown on password sharing was successful. This is exactly what the company needs to keep increasing revenue and grow.
Netflix stock technical analysis
The stock price is trading in an ascending channel, which is typically a bearish pattern as the price often breaks on the lower side of the channel.
However, the price is trading near a strong support level of $400 and a bounce is still a likely outcome. A break below the channel will probably push the price to $350 where multiple moving averages converge.
Any move higher will have to break $500 and hold above it if we are to see a retest of the previous top at $700.
Netflix has outperformed the S&P 500’s 15% return year-to-date, with a 41% gain during the same period.
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