Netflix upgraded to Overweight from Neutral at Piper Sandler

Piper Sandler analyst Matt Farrell upgraded Netflix to Overweight from Neutral with a price target of $800, up from $650. The shares this morning were downgraded at Barclays to Underweight. Piper says Netflix “is a clear leader in streaming.” The firm’s prior Neutral stance was centered around valuation, but now, it appreciates “the company is expensive for a reason.” Moving forward, there are still levers to be pulled by Netflix in the ads-free business, particularly around pricing, “while the ads-tier has been largely de-risked heading into next year,” the analyst tells investors in a research note. Piper believes consensus margins could also prove to be conservative in 2025 and 2026 based on the incremental margins over the last few quarters. It sees “multiple scenarios to positive estimate revisions.” and says that in a potentially weaker macro environment, Netflix’s subscription based model “becomes even more attractive.”