© Reuters. Citi raises Netflix (NFLX) target, believes consensus subscriber estimates may need to rise
Citi analysts raised the Netflix (NASDAQ:) price target to $660 from $555 on Monday, maintaining a Neutral rating on the stock.
In a research note, the investment bank told investors that net adds have exceeded consensus estimates for three consecutive quarters, and they feel consensus subscriber estimates may need to move higher.
Citi explained that they think investor expectations for net adds are above the sell side at 4.3 million net adds and closer to 8 million.
Citi believes the outperformance has been driven by the streaming giant’s well-documented ad tier and password crackdown.
“Looking ahead, we expect the firm to continue to see healthy sub growth and see scope for consensus subscriber estimates to move higher,” wrote Citi, which raised its estimates to reflect stronger sub growth.
They added: “We believe 1Q24 and 2Q24 net additions may be ~3 million too low. In addition, it suggests consensus 2024 net additions may be ~5 million too low, while net additions from 2025 through 2027 may be ~3 million too low.”