On October 12, 2023, JP Morgan Chase released a financial report outlook for Netflix 2023Q3. On October 18, Netflix will release the third-quarter financial report.
I. Valuation
Stock Rating:Overweight
Closing price: $365.93 (October 11, 2023)
Target price: $455.00 (December 24, 2023)
2.Business performance outlook
Since the 2Q earnings report, NFLX stock has significantly underperformed the market, dropping 23%, while the S&P 500 index fell 4%. Jp Morgan Chase lowered its forecast on September 28 to reflect recent management comments on operational profit expansion, fourth quarter ARM (paid sharing), and strength of the US dollar.
JP Morgan Chase remains positive on Netflix overall, but acknowledges an increasing number of issues in the 3Q financial report. Investors are seeking clearer explanations on recent conference comments, changes in advertising business leadership, and whether the softer profit trajectory stems from competitive strength, slower growth, or a combination of both.
3. Key factor analysis
Paid sharing
JP Morgan Chase expects that by the end of 2023, Netflix's borrower profits (through new accounts) will cumulatively reach 18 million, by the end of 2024 to 30 million, and by the end of 2025 to 37 million.
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