Why This Netflix Analyst Is Double Upgrading The Streaming Stock: 'Difficult For Competitors To Catch'

New content and catalysts from Netflix Inc NFLX have one analyst upgrading the streaming stock and lifting their price target ahead of the new year.

The Netflix Analyst: CFRA Research analyst Kenneth Leon upgrades shares of Netflix from Sell to Buy and raises the price target from $225 to $310.

The Netflix Takeaways: Leon sees Netflix as a leader in the streaming market and tough for competitors to keep up with financially, something the company said during its third-quarter earnings report.

“We think it will be difficult for competitors to catch Netflix, one of the few profitable streaming providers with global scale,” the analyst said. 

CFRA calls for catalysts in the form of new content, advertising revenue, new subscription plan pricing and efforts to “better control sharing of subscription accounts.”

Original content like “Emily in Paris,” “Glass Onion: A Knives Out Mystery” and “The Witcher: Blood Origin” could help boost subscriptions and lower churn, Leon said. 

The analyst has earnings per share estimates of $10.35 in 2022 and $10.95 in 2023.

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The Streaming Stock Landscape: The streaming market continues to be highly competitive, but Leon said Netflix should be the leader and is profitable.

Netflix may not need to go the direction that other streaming platforms from Apple Inc AAPL and Amazon.com Inc AMZN are going, the analyst said. 

“We agree that Netflix does not need a major sports event or sponsor, which risks a big loss leader,” he said. 

The comment comes as Apple and Amazon are investing in sports rights to boost visibility and gain new subscribers.

“The Witcher: Blood Origin” premiered on Dec. 25 and has seen less than stellar reviews. Viewership figures for the first week of the spinoff show will be out on Tuesday.

The third season of “Emily in Paris” had 117.6 million hours viewed in its first week of availability, trailing only the smash hit “Wednesday,” which had 118.5 million viewers in its fifth week.

“Glass Onion: A Knives Out Mystery” had 82.1 million hours viewed in its first week, ranking as the top watched movie the week of Christmas.

Netflix will report fourth-quarter results after market close on Jan. 19, which could provide a better look at how big of an impact smash hits like “Wednesday” had on subscribers and churn.

The earnings report could also provide an updated look at what the company expects in 2023.

NFLX Price Action: Netflix shares are up 4.78% to $290.12 on Thursday versus a 52-week range of $162.71 to $620.61.

Read Next: What Other Analysts Are Saying About Netflix 

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