Amid the recent stock market turmoil, investors have turned to two giants in streaming entertainment: Netflix and Spotify Technology.
Shares of both companies appear to have found support at their 50-day moving averages this week.
Also, Netflix and Spotify each received buy ratings in coverage-initiation reports on Tuesday.
FBN Securities analyst Matthew Thornton initiated coverage of internet television network Netflix with an outperform rating and 1,165 price target.
China Renaissance analyst Yiwen Zhang started coverage of streaming music leader Spotify with a buy rating and price target of 740.
On the stock market today, Netflix stock rose 0.6% to close at 976.72. Spotify stock advanced 0.7% to 580.22.
Netflix stock is on IBD's Big Cap 20 and Stock Spotlight lists. Spotify is on IBD's SwingTrader and Tech Leaders lists.
Netflix is "well-suited to weather" the current macroeconomic climate, Thornton said in a client note.
"Our forecast equates to Netflix share of consumer TV spend increasing from 13% in 2024 to 22% in 2034 and share of TV ad spend in-footprint increasing from 1% to 12%," he said.
Thornton predicts Netflix's revenue will grow at a compound annual rate of 9% over the next 10 years.
Netflix has a rich content slate this year, including new seasons of "Squid Game," "Stranger Things" and "Wednesday," he said.
Meanwhile, Thornton initiated coverage of Spotify stock with a sector perform, or neutral, rating. He set a price target of 645 on Spotify.
Thornton said he is positive on the company's long-term outlook, but sees near-term challenges such as in ad-supported streaming.
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