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Key Takeaways
- Netflix shares popped Wednesday after the corporate reported 19 million new subscribers within the fourth quarter and lifted its 2025 outlook.
- The streamer additionally raised its subscription costs, which analysts say is prone to drive income development with "little pushback."
- Analysts at a number of companies raised their value targets on the inventory following the outcomes.
Netflix (NFLX) is coming into 2025 “firing on all cylinders” after including 19 million subscribers within the fourth quarter and elevating its subscription costs, JPMorgan analysts mentioned Wednesday.
Netflix yesterday mentioned it might elevate costs—together with bumping its well-liked ad-supported plan to $7.99 from $6.99 within the US— after what could also be its “strongest content quarter ever,” the analysts mentioned.
"Heading into a sturdy 2025 slate, we anticipate little pushback" within the US, mentioned JPMorgan.
The upper costs come as Netflix’s ad-supported tier drove 55% of all Netflix fourth-quarter signups in markets the place the plan was obtainable. That improve, which helped the corporate finish the yr with greater than 300 million members, units the stage for extra income development in 2025, Wedbush analysts mentioned.
Yesterday's outcomes lifted Netflix inventory at the moment, with the shares not too long ago up about 11% to steer all gainers within the S&P 500 and a few on Wall Road lifting already-bullish value targets.
Each JPMorgan and Wedbush maintained “buy” or equal scores and raised their value targets to $1,150. Analysts at Oppenheimer and UBS set the identical goal following the outcomes. Financial institution of America raised its goal to $1,175. The shares not too long ago traded a couple of dollars beneath $970.
“While massive subscriber growth was the primary driver in 2024, we expect price increases to drive revenue growth in 2025 and the ad tier to drive revenue higher in 2026,” Wedbush mentioned.
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