Analysts re-rated Netflix Inc. ahead of its Q1 results.
Barclays analyst Kannan Venkateshwar lowered the price target on Netflix to $380 from $425 (8.4 percent upside) and kept an Equal Weight rating on the shares.
Netflix’s Q1 growth may not be very different from its weak guidance.
Netflix’s accounting treatment of Russia, given the shutdown of operations there, may further affect the global numbers.
Netflix appears to be on a path to 4 million subscribers, better than company guidance based on the average predicted value across various short and long-term models, but still weak in the absolute for a Q1.
Other than Netflix, the only service where trends stand out is HBO Max, which appears to have seen strong engagement throughout the quarter.
The price target cut reflects a weak near-term growth outlook and an ongoing shift away from revenue multiples among investors.
Piper Sandler analyst Thomas Champion reiterated an Overweight rating on Netflix with a $562 price target (60.3 percent upside) ahead of the company’s Q1 results.
The shares are at “trough multiples” despite recent success with Squid Game and the return of critical shows like Stranger Things and The Crown.
The analyst’s survey work suggests an opportunity for Netflix for an advertising-supported offering and more restrictive password-sharing policies.
BMO Capital analyst Daniel Salmon maintained Netflix with an Outperform and lowered the price target from $650 to $640 (82.6 percent upside).
By Anusuya Lahiri
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