On Monday, Citi updated its outlook on Netflix (NASDAQ:NFLX) shares, increasing the price target to $660 from the previous $555, while keeping a Neutral stance. The adjustment comes after Netflix consistently surpassed consensus estimates for subscriber additions for three consecutive quarters.
The streaming giant's performance has been attributed to its recent initiatives, including the introduction of an advertising tier and measures to curb password sharing. These strategies are believed to have significantly contributed to the company's subscriber base expansion.
Citi anticipates that Netflix will maintain a strong pace in growing its subscriber numbers. There's an expectation that forecasts for subscriber growth among analysts could be revised upwards. Citi's revised estimates are a reflection of this anticipated strong subscriber growth.
Netflix's strategic moves, particularly the ad-supported tier and the crackdown on password sharing, are seen as key drivers for the recent surge in subscriber numbers. These initiatives are part of Netflix's efforts to diversify its revenue streams and address account sharing, which has been a longstanding issue impacting the company's revenue.
Citi's updated price target suggests a positive outlook for Netflix's future performance in terms of subscriber growth. The firm's analysis points to a continued positive trend, which may influence the broader market consensus on the streaming company's stock valuation.
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