Shares of Netflix Inc. rose on Monday, to counter a broader stock market sell-off, after a new Oppenheimer analyst addressed the online video giant explaining why it’s time for investors return investment.
2.3% increase in pre-market trading, while futures
for the S&P 500
down 0.9%. It is the only component of an exchange-traded fund that has the SPDR Media Services industry
reached position before opening.
Analyst Jason Helfstein takes on Netflix coverage and lifts the rating to better performance than performance. He has a $325 price target on the stock, implying a roughly 35% gain from Friday’s closing price of $240.13.
Not only will launching a lower-priced ad-level subscription attract some first-time subscribers, Helfstein believes there is a greater opportunity to re-engage those who previously discontinued the service.
“Ad-level launch will accelerate subscriber growth, boost ARPU [average revenue per user] and slow,” Helfstein wrote in a note to clients.
He also believes that Netflix will demand a high cost per thousand (CPM) from advertisers, as it has the highest viewership in the industry and as streaming keep sharing from TV.
“[Netflix] The draw, Helfstein writes, for a significant audience for variety show releases, comparable to award shows and major sporting events, shows that the company can sell advertising at CPMs much higher than the average on TV. “Alternatively, it may choose to release programs in conjunction with product launches by major advertisers.”
about ad-supported subscriptions and move into the game arena can provide extra returns for results and stocks.
With the Helfstein upgrade, 14 out of 45 analysts surveyed by FactSet are bullish on Netflix, while 6 are bearish and 25 are neutral. At the end of 2021, 34 out of 47 analysts were bullish, 4 bearish, and 9 neutral. The average share price target has dropped to $244.91 from $681.79 over the same period.
Meanwhile, Netflix’s stock has tumbled in recent months, like Q2 results better than expected reports in July helped spur a rebound. Follow a disappointing first quarter report in April, in which the company said it lost subscribers for the first time since its founding.
After falling 72.4% so far to a five-year low of $166.37 on May 11, the stock is up 44.3% through Friday. Meanwhile, the media services ETF has dropped 8.8% since May 11, and the S&P 500 has lost 1.6%.