Wall Street analysts are forecasting a strong quarterly report from streaming video leader Netflix late Thursday. But they differ on the proper valuation for Netflix stock.
Jefferies analyst James Heaney on Tuesday reiterated his buy rating on Netflix stock and raised his price target to 780 from 655.
Netflix is "well positioned" to beat subscriber estimates for the second quarter, Heaney said. The company's "robust content slate" should support continued growth in the second half of 2024, he said.
Meanwhile, Benchmark analyst Matthew Harrigan maintained his sell rating on Netflix stock. But he upped his price target to 545 from 450.
"Netflix management undeniably continues to execute well," Harrigan said in a client note Tuesday. He pointed to the company's advertising and paid-sharing initiatives as well as live content moves. But he doesn't think the current valuation for Netflix stock is justified.
Netflix is being valued like a "Nasdaq 100 high-growth technology name" while "disregarding its hybrid media stock character," Harrigan said.
Netflix Stock Dips Before Q2 Report
On the stock market today, Netflix stock fell a fraction to close at 656.32.
Analysts polled by FactSet expect Netflix to add 3.97 million subscribers in the second quarter, ending the period with 273.6 million subscribers worldwide.
Wall Street is modeling Netflix earnings of $4.74 a share on sales of $9.53 billion in the June quarter. That would translate to year-over-year growth of 44% in earnings and 16% in sales.
Popular content on Netflix in the second quarter included season three of costume drama "Bridgerton," miniseries "Baby Reindeer," and shark-attack movie "Under Paris."
On Monday, Netflix stock scored three price-target hikes. Morgan Stanley kept its overweight rating and raised its price target to 780 from 700. BofA Securities maintained its buy rating and upped its price target to 740 from 700.
However, MoffettNathanson stuck with its neutral rating on Netflix stock while raising its price target to 565 from 530.
Netflix stock is on IBD's Big Cap 20 stock list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
