Netflix Targets Operating Margin Expansion With Growing AVOD Members And Monetization - Analyst Sees Content Innovation At Scale
Portfolio Pulse from Nabaparna Bhattacharya
BMO Capital Markets analyst Brian J. Pitz reaffirmed an Outperform rating on Netflix, Inc. (NASDAQ:NFLX), raising the price target from $638 to $713, citing potential for member growth and operating margin expansion from 2024 onwards. Pitz highlights initiatives like paid sharing and T-Mobile ad tier shift, along with content innovation, as key drivers. He estimates Netflix will capture a significant share of linear TV dollars shifting online, with advertising expected to make up about 10% of total revenue by 4Q25. Netflix is anticipated to have over 41 million AVOD members by FY24, growing to over 54 million by FY25.
April 17, 2024 | 5:11 pm
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Netflix's price target was raised to $713 by BMO Capital Markets, with expectations of significant member growth and operating margin expansion driven by advertising and content innovation.
The upgrade in Netflix's price target by BMO Capital Markets is based on the anticipated growth in AVOD members and the successful capture of a significant portion of linear TV dollars shifting online. The analyst's projection of advertising revenue comprising about 10% of total revenue by 4Q25, along with the expected increase in operating margins, suggests a positive outlook for Netflix's financial performance and stock price in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100