Netflix stock has been rising ahead of the video streamer's second-quarter earnings report, but Wall Street analysts are split about prospects for further appreciation.
Year to date, Netflix stock has risen over 52%. On the stock market today, Netflix climbed 1.4% to close at 450.38.
The internet television network plans to report its June-quarter results late Wednesday. Key focus areas include the company's paid-sharing rollout and advertising-supported offerings, Macquarie analyst Tim Nollen said in a note to clients Thursday.
"The bar is already set pretty high for Q2 expectations," he said.
Nollen reiterated his neutral rating on Netflix stock but raised his price target to 410 from 350.
Netflix Facing Heightened Competition
Netflix's second-quarter earnings come amid reports of consumers cutting back on streaming video services.
Analysts polled by FactSet predict that Netflix will add 1.8 million subscribers in the June quarter. It ended the first quarter with 232.5 million total subscribers worldwide.
Wall Street is forecasting Netflix earnings of $2.83 a share, down 12% year over year. However, analysts see revenue climbing 4% to $8.27 billion.
Netflix's subscriber growth has softened over the past year amid heightened competition from Walt Disney's Disney+, Warner Bros. Discovery's Max and others.
Also, with services like Max and Disney+ expanding globally, growth for Netflix may become more difficult to come by, said Daniel Morgan, senior portfolio manager for Synovus Trust, in a note Thursday.
"There is a debate among investors over the longer-term prospects for the business," Morgan said.
Netflix Stock Gets Price-Target Hikes
UBS analyst John Hodulik sees Netflix growth accelerating in the second half of the year, boosted by paid sharing.
"Checks on engagement, downloads and search interest were all constructive for the newly launched paid-sharing markets," Hodulik said in a recent note.
Hodulik kept his buy rating on Netflix stock and upped his price target to 525 from 390.
Meanwhile, Morgan Stanley analyst Benjamin Swinburne struck a more cautious tone in a note to clients this week. He kept his equal-weight rating on Netflix stock but hiked his price target to 450 from 350.
Swinburne believes there's an increased risk of multiple compression for Netflix stock over the next 12 months.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
