Analysts at Argus Research have raised their full-year profit forecast for Netflix (NASDAQ:NFLX) after being encouraged by the company’s move into live sports programming with the NFL game streaming deal and for trying out new experiential initiatives to retain and/or grow its customer base.
Argus has raised its 2024 EPS estimate for the streaming giant to $18.35 from $16.54 and its 2025 forecast to $20.42 from $20.02. The Seeking Alpha consensus estimate for 2024 and 2025 EPS is $18.34 and $22.13, respectively. Argus has set its long-term EPS growth rate for Netflix (NFLX) at 15%.
“We see the company’s incremental moves into live event sports programming as particularly directed to enhancing its advertising market, as live events have a higher value for advertisers than typical scripted content and the NFL holds the most value in the U.S. sports broadcast ecosystem. Meanwhile, management continues to stress strategic continuity in its production of original, buzzworthy content. It is also working to improve the “content discovery” process for subscribers… It remains the “anchor tenant” for consumers in video streaming, with an attractive slate of projects on track for release,” Argus analysts wrote in their Market Digest report dated July 2.
Argus also noted that the “Netflix House” concept, which will fill abandoned department store space and add experiential entertainment, dining, and retail experiences, will build on smaller, earlier company concepts around fandom for its intellectual property through experiential entertainment.
“Once again, the company is using incremental iterative steps, primarily directed at solidifying its subscriber base and attracting new subscribers while perhaps also tapping into a new revenue stream over the long term,” they added.
Argus maintained its “Buy” rating on Netflix (NFLX) and hiked the target price to $767 after shares recently blew through its previous target of $660. Stock is +32.8% so far this year as of Monday’s close.