Analyst Jeff Wlodarczak of Pivotal Research, a Netflix bear who two weeks ago warned that investors should sell because there were risks in the streamer's embrace of a lower-priced ad tier, has turned very bullish, flashing a “buy” signal.
In a research note Wednesday, Wlodarczak forecast that Netflix stock could soar to as high as $375 a share, higher than most other Wall Street predictions.
Netflix shares were up more than 3% to about $301 in midday trading Wednesday.
Wlodarczak said he changed his tune after Netflix’s upbeat third-quarter earnings report, which reversed the company's stock price plunge and sent it moving higher..
The analyst said he increased his forecast for net new 2023 subscribers from 5.5 million to 15 million (the Wall Street consensus is 12.5 million). He said the new forecast is based on the expectation that Netflix will be successful at converting people sharing passwords into paying customers and the attractiveness of the new low-priced ad-supported tier.
“Netflix stock appears to be a relatively attractive place for investors to be amidst major slowdowns in digital advertising (Netflix should be able to lever pirate conversion and ad supported to grow in virtually any environment),” he said. “While competition is heating up Netflix still provides the most unique and powerful streaming experience globally with a reasonable path to accelerate subscriber growth over at least the next year."
Wlodarczak added that he thinks CEO Reed Hastings will look to sell Netflix ( most likely to Microsoft) as early as 2024. ■
