Key Takeaways
- Morgan Stanley named Netflix its “top pick” and said a recent pullback in the stock represents a buying opportunity.
- The analysts expect the streaming giant to “demonstrate relative resistance” against the current economic environment.
- Netflix’s subscriber base averages nearly two hours of viewing a day per member, Morgan Stanley noted.
Netflix (NFLX) stock is a new “top pick” of analysts at Morgan Stanley, who see the streaming giant as well-positioned to withstand the current tariff landscape.
“We expect Netflix to demonstrate relative resilience in a weaker global macro,” Morgan Stanley said Tuesday, reiterating an “outperform” rating and $1,150 price target for the stock. The consensus analyst target is about $1,099, according to Visible Alpha.
With Netflix shares down nearly 7% since the Trump administration imposed tariffs last week to about $854 in recent trading Wednesday, Morgan Stanley’s target implies an upside of almost 33%. “[We] view the recent pullback as a buying opportunity,” the analysts said.
Netflix Subscriptions Show ‘Momentum’
Netflix has shown “momentum” in its core subscription business, Morgan Stanley said, and its membership base averages nearly two hours of viewing a day per member, the firm said. That momentum lowers the company’s overall risk, the bank added, even if the advertising market struggles amid rising trade tensions.
However, Netflix does have operations outside the U.S., Morgan Stanley said, and the company has had to navigate rising production costs and streaming taxes in the past. The company “typically” passes those increases off to consumers, analysts said.
Netflix is scheduled to report its first-quarter results on April 17.
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