'Full Stream Ahead': BofA Hits The Play Button On Netflix Stock Expecting A Rerun Of Higher Share Prices

BofA has stopped flipping through channels and tuned into Netflix Inc NFLX, anticipating a rerun of $370 per share.  

What To Know: BofA Securities analysts reinstated Netflix with a Buy rating on Tuesday and announced a $370 price target after identifying a "significant runway for growth" in the streaming space.

"Supported by its world-class brand, leading global subscriber base and position as a leading innovator we believe Netflix looks poised to outperform," BofA analysts wrote in a note to clients.

Related Link: Netflix Shares Are Down 50% This Year: Is It The Right Time To Go Long?

There are several catalysts supporting the analyst firm's thesis, led by a significant subscriber runway.

BofA expects Netflix to continue to benefit from the shift from linear to streaming, and sees renewed upside potential as a result of its password-sharing crackdown and new ad-supported offering.

Netflix estimates that 100 million potential subscribers are lost as a result of password sharing.

"We view this current headwind as an enormous potential long-term opportunity, with sizable upside realized in 2023/2024," BofA said.

The analyst firm also expects Netflix's ad tier to drive 3.5 million incremental subscribers by 2024. 

Lastly, BofA points out that Netflix turned cash flow positive in 2020, which separates it from the competition. 

"In this more uncertain macro environment, reaching this milestone amplifies Netflix’s first mover advantage relative to other traditional media companies. Going forward, Netflix has targeted stable cash content spending over the next few years, which should drive additional operating leverage and FCF growth," BofA said.

See Also: Where Netflix Stands With Analysts

NFLX Price Action: Netflix has a 52-week high of $700.99 and a 52-week low of $162.57.

The streaming stock was up 3.39% at $309.06 Tuesday afternoon, according to Benzinga Pro.

Photo: yousafbhutta from Pixabay.