© Reuters.
Netflix (NASDAQ:) stock rose nearly 16% in early Thursday trade after the company reported better-than-expected results for its third quarter.
Better-than-expected subscriber growth has fueled a rally in shares, which was also supported by at least 3 analyst upgrades.
A favorable content slate, successful password initiatives, and the expansion of the ad-supported tier are some of the key reasons why investors are increasingly more positive on Netflix.
Looking ahead to 2024, Netflix’s management has outlined a narrative that aims for a balanced contribution to growth from both members and ARM (Average Revenue Per Member). The framework includes targeting 22-23% operating margins in 2024, an improvement from approximately 20% in 2023.
Morgan Stanley analysts upgraded the rating to Overweight from Equal Weight with a price target raised to $475 per share.
“We believe Netflix will deliver the objectives it set out a year ago, accelerate revenue growth back to double digits and expand margins. At the same time, some of the froth in the stock and expectations have come out, creating a better entry point,” the analysts said in a note.
Earlier today, KeyBanc and Truist analysts also upgraded the stock today.
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