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On Wednesday, Oppenheimer analysts maintained an Outperform rating for the streaming giant Netflix (NASDAQ: NASDAQ:NFLX).
The revision was attributed to the impact of foreign exchange rates. Helfstein pointed out that Netflix's stock performance has been weaker compared to the broader market, with a 10% drop from its December high, whereas the NASDAQ index saw only a 5% decline.
The analysts outlook for Netflix remains positive, especially leading into the fourth-quarter earnings. He anticipates an increase in subscriber numbers, bolstered by the popularity of content such as the "Harry & Meghan" series, the NFL Christmas games, and the anticipated "Squid Game" season 2.
The analysts also foresee the full 2025 content lineup and the expansion of advertising as driving forces for growth in the first quarter.
However, valuation concerns present a notable risk, with Netflix trading at 29 times its projected 2026 earnings per share (EPS), a figure that is compounded by currency headwinds.
The analysts have slightly lowered their 2025 revenue and EPS estimates for Netflix by 4% and 6%, respectively, due to the strengthening of the dollar in the fourth quarter.
Looking further ahead, Oppenheimer's analysis suggests that Netflix is well-positioned to benefit from a less competitive landscape, which could lead to improved customer retention and better content leverage.
The potential for increased revenue from live events and an expanded advertising model also contributes to a positive long-term view. The target price of $1,040.00 (down from $1,065.00) by Oppenheimer is based on a 20 times multiple of Netflix's estimated 2030 EPS, discounted by 7%.
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