Netflix Stock Hits 6-Month High — Even As Wall Street Remains Skeptical

The company knocked its Tuesday earnings report out of the park, adding 2.4 million new paid subscribers after consecutive quarters of subscriber losses, far exceeding its own estimates.

Netflix also beat estimates for revenue and profit, and unveiled several initiatives aimed at increasing revenue, including cracking down on password sharing and more details on its cheaper paid service with ads slated to debut in November.

Santosh Rao, head of research at Manhattan Venture Partners, gave the earnings report an “A+” grade, while JPMorgan Chase upgraded the stock to a $330 price target, indicating 20% upside even from its current price.But some major banks aren’t buying the idea that Netflix, which was once the S&P 500’s worst performer of 2022, has seen its last dark days.

Goldman Sachs and Bank of America both maintained underperform ratings for Netflix, with Goldman raising its price target from $182 to $200 and Bank of America keeping its target at $196, each representing about 38% downside.”

We remain skeptical on the net benefits of Basic with Ads and its password sharing initiatives,” Bank of America analyst Nat Schindler said, noting the bank remains “concerned by the company’s content spending remaining unfocused with a low hit rate, with growth at this point largely tapering off as results become more content hit driven.”

Increased competition among streamers and the “potential for a weaker consumer spending dynamic” given poor macroeconomic conditions are also hurdles Netflix faces, Goldman Sachs analysts Eric Sheridan, Lane Czura and Sarah Boulos wrote in a note to clients.