Oppenheimer Upgrades Netflix (NFLX) Stock Following New Ad-Tier Plans

  • An Oppenheimer analyst just upgraded Netflix (NFLX) stock.
  • The analyst cites Netflix’s new, low-priced ad-tier plan as a potential catalyst.
  • Despite the news, NFLX stock is trading relatively flat so far today.
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Streaming content viewers won’t mind ads. At least, that’s what Netflix (NASDAQ:NFLX) is banking on. The company is now exploring ad-supported streaming and just received a high-conviction upgrade from Oppenheimer. Interestingly, though, the upgrade didn’t move the needle for NFLX stock this morning.

Netflix needs new subscribers — the sooner, the better. After a net loss of 970,000 paid subscribers in the second quarter of 2022, it has to get creative in luring consumers back to the platform.

At least one analyst seems to lean bullish on Netflix’s new strategy, however. Oppenheimer analyst Jason Helfstein reportedly expects Netflix to “attract some first-time subscribers” by introducing a lower-priced, ad-supported subscription plan. Apparently, Helfstein also sees a “larger opportunity to re-engage those who have previously discontinued service.”

Of course, it’s a gamble for Netflix to launch a low-cost plan, as ads may annoy some viewers. Still, Helfstein anticipates that the “ad-tier launch should accelerate subscriber growth, drive ARPU [average revenue per user] and slow churn.”

What’s Happening With NFLX Stock?

Given Helfstein’s optimistic commentary, one might expect NFLX stock to rocket higher today. Oddly enough, though, the shares remained flat in early trading. As of this writing, they are only slightly in the green.

There’s still time for investors to grab some shares today, however. Perhaps people just need more time to absorb the good news. After all, Helfstein upgraded NFLX stock from “perform” to “outperform.” That’s similar to a rating raise from “hold” to “buy.”

On top of that, the Oppenheimer analyst assigned Netflix shares an ambitious price target of $325. This implies roughly 35% upside potential from the current stock price.

Helfstein forecasts that ad-supported content will accelerate Netflix’s subscriber growth. So, even if investors aren’t too impressed today, there could still be a delayed reaction — and lofty price action – for NFLX stock.

On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2022/09/oppenheimer-upgrades-netflix-nflx-stock-following-new-ad-tier-plans/.

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