Netflix (NASDAQ:NFLX) Stock Rating Raised to "Strong-Buy" at Jefferies Financial Group

Key Points

• Jefferies upgraded Netflix to “strong buy,” adding to a generally positive analyst outlook. MarketBeat reports a consensus rating of “Moderate Buy” and an average price target of $94.41.
• Netflix shares opened at $72.61, well below the consensus target and their 52-week high of $124.86. The company recently reported $0.80 in quarterly EPS, slightly beating estimates, while revenue rose 13.4% year over year to $12.56 billion.
• Institutional investors hold approximately 80.93% of Netflix’s stock, with major firms including BlackRock, State Street and Bank of America adding or expanding positions; insiders, however, sold shares worth about $13.1 million during the quarter.

Netflix (NASDAQ:NFLX - Get Free Report) was upgraded by Jefferies Financial Group to a "strong-buy" rating in a research report issued on Thursday, Zacks reports.

Other research analysts have also issued reports about the company. BMO Capital Markets reiterated an "outperform" rating on shares of Netflix in a research note on Tuesday, September 22nd. Citigroup restated a "market perform" rating on shares of Netflix in a research note on Thursday. CICC Research lowered their target price on shares of Netflix from $110.00 to $90.00 and set an "outperform" rating on the stock in a report on Tuesday, July 21st. KeyCorp lowered their target price on shares of Netflix from $92.00 to $85.00 and set an "overweight" rating on the stock in a report on Tuesday. Finally, Barclays set a $70.00 target price on shares of Netflix and gave the stock an "equal weight" rating in a research report on Wednesday, October 7th. Four analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, fifteen have given a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus price target of $94.41.

Netflix Price Performance

Netflix stock opened at $72.61 on Thursday. The business has a 50 day simple moving average of $75.25 and a 200 day simple moving average of $80.73. The company has a debt-to-equity ratio of 0.39, a current ratio of 1.14 and a quick ratio of 1.14. The company has a market capitalization of $302.34 billion, a PE ratio of 22.85, a price-to-earnings-growth ratio of 1.00 and a beta of 1.62. Netflix has a one year low of $65.08 and a one year high of $124.86.

Netflix (NASDAQ:NFLX - Get Free Report) last announced its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, beating the consensus estimate of $0.79 by $0.01. Netflix had a return on equity of 40.02% and a net margin of 28.22%. The business had revenue of $12.56 billion for the quarter, compared to analyst estimates of $12.58 billion. During the same quarter in the previous year, the firm earned $0.72 EPS. Netflix's quarterly revenue was up 13.4% on a year-over-year basis. On average, sell-side analysts forecast that Netflix will post 3.59 EPS for the current fiscal year.

Insider Transactions at Netflix

In other news, insider David A. Hyman sold 5,723 shares of the stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $72.85, for a total transaction of $416,920.55. Following the sale, the insider owned 316,100 shares in the company, valued at approximately $23,027,885. This represents a 1.78% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Spencer Neumann sold 9,248 shares of the firm's stock in a transaction on Monday, August 10th. The shares were sold at an average price of $75.79, for a total value of $700,905.92. Following the completion of the sale, the chief financial officer owned 73,787 shares of the company's stock, valued at approximately $5,592,316.73. This trade represents a 11.14% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 179,045 shares of company stock worth $13,132,194. 1.24% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. BlackRock Inc. acquired a new stake in Netflix in the 2nd quarter valued at about $24,902,221,000. State Street Corp raised its stake in shares of Netflix by 4.9% in the second quarter. State Street Corp now owns 180,129,582 shares of the Internet television network's stock worth $12,861,252,000 after acquiring an additional 8,474,820 shares during the last quarter. Bank of America Corp DE lifted its position in shares of Netflix by 4.3% during the first quarter. Bank of America Corp DE now owns 57,942,812 shares of the Internet television network's stock worth $5,571,201,000 after purchasing an additional 2,376,349 shares in the last quarter. Invesco Ltd. lifted its position in shares of Netflix by 835.9% during the fourth quarter. Invesco Ltd. now owns 43,462,696 shares of the Internet television network's stock worth $4,075,062,000 after purchasing an additional 38,818,947 shares in the last quarter. Finally, Bank of New York Mellon Corp acquired a new position in shares of Netflix during the second quarter worth approximately $1,906,482,000. Institutional investors and hedge funds own 80.93% of the company's stock.

Netflix News Summary

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Jefferies initiated coverage with a Buy rating and an $85 price target, citing potential revenue support from subscription-price increases and advertising. Netflix stock gets bullish analyst call ahead of next week's earnings
• Positive Sentiment: Netflix named former Disney and Fox executive Peter Rice as chief content officer, replacing Bela Bajaria. Rice’s experience could help Netflix improve its content strategy and viewer engagement as competition intensifies. Netflix names former Disney executive Rice as new content chief
• Neutral Sentiment: Netflix will release third-quarter results on October 20. Wall Street estimates for revenue, earnings and operating metrics may drive volatility as investors look for evidence that pricing, advertising and content investments are offsetting weaker engagement. Ahead of Netflix Q3 earnings
• Negative Sentiment: Netflix is eliminating roughly 1,000 positions, or 6% of its workforce, its largest reduction since 2022. Management described the move as a resource-allocation and efficiency effort, but investors may view it as evidence of slowing growth and pressure to control costs. Netflix is laying off roughly 6% of its workforce
• Negative Sentiment: Reports citing app data indicate U.S. churn has risen and viewing engagement has weakened. Those trends raise questions about Netflix’s ability to retain subscribers amid competition from other streaming services, YouTube and creator-led video. Netflix warning signs ahead of Q3 earnings

About Netflix

Netflix, Inc NASDAQ: NFLX is a global entertainment company that operates a subscription-based streaming service. It offers a broad range of television series, films, documentaries, and other programming, including original productions developed under the Netflix brand and licensed content from third-party studios.

The company also provides advertising-supported viewing options in some markets and has expanded into related entertainment categories, including mobile and cloud-based games, live programming, and consumer products associated with selected titles.

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