Investing.com– Seaport upgraded its rating on Netflix Inc (NASDAQ:) on Wednesday, citing expectations for higher subscriber growth as the streaming giant prepares to report its fourth-quarter earnings next week.
Seaport upgraded Netflix to Buy from Neutral, with a price target of $955- representing an upside of 12.5% from Wednesday’s close.
The brokerage said it expects higher than initially anticipated additions in members- at 9 million in the fourth quarter, compared to prior expectations of 5.7 million.
Seaport also sees Netflix’s original content providing strong tailwinds to the stock, especially with the release of the second season of smash hit Squid Games during the quarter.
The brokerage said advertising growth, more top content projects and the winning of live sports rights- such as the Jake Paul vs. Mike Tyson match- all heralded a positive quarter.
“NFLX should remain a core holding due to top-line growth, OI margin expansion, and FCF conversion,” Seaport analysts wrote in a note.
Netflix will report its December quarter earnings on January 21. The company is expected to clock earnings per share of $4.2 on revenue of $10.13 billion.
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