Analyst Maintains Hold on Netflix Amid Growth and Pricing Strategy Considerations

Analyst Eric Sheridan from Goldman Sachs reiterated a Hold rating on Netflix (NFLX – Research Report) and increased the price target to $705.00 from $659.00.

Eric Sheridan has given his Hold rating due to a combination of factors, including Netflix’s upcoming quarterly earnings, the company’s new advertising initiatives, and its pricing strategy. The anticipation of pricing actions and the potential for broad-based price increases in the following year are key investor focal points. Additionally, there are ongoing debates about how Netflix’s efforts to curb password sharing and its content lineup may contribute to significant subscriber growth, even as the company plans to stop reporting subscriber numbers. Furthermore, the evolving media industry and its effect on the competition for content creation costs are also critical considerations influencing the rating.

Sheridan’s Neutral rating reflects the stock’s performance, noting that NFLX shares have outperformed the S&P 500 index year-to-date. However, the forward-looking multiples that gauge growth potential already seem to account for the positive operating cadence expected in 2025 and 2026. This suggests that current stock levels have already integrated anticipated operational successes, leaving limited room for additional upside based on these factors. Sheridan has increased the 12-month price target to $705 from $659, acknowledging Netflix’s market leadership and its competitive position, but maintains a Neutral stance due to the stock’s recent strong performance relative to the market.

Sheridan covers the Communication Services sector, focusing on stocks such as Alphabet Class A, Netflix, and Electronic Arts. According to TipRanks, Sheridan has an average return of 13.0% and a 55.82% success rate on recommended stocks.

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Netflix (NFLX) Company Description:

Netflix, Inc. is a subscription-based streaming service through which members can view TV shows, documentaries and movies on any internet-connected device. The company also offers its DVD-by-mail service in the United States. Founded by Marc Randolph and Wilmot Reed Hastings Jr., on August 29, 1997, Netflix is headquartered in Los Gatos, CA.