Analyst revises Netflix price target amid ‘growing ad revenue'

Core Viewpoint - Netflix has reached an all-time high stock price of $940 following a price target increase by J.P. Morgan from $850 to $1,010, driven by strong subscriber growth, advertising revenue, and compelling content [1][4]. Subscriber Growth and Financial Performance - As of December 10, Netflix shares were trading at $936.56, reflecting a 99% year-to-date gain, with 44% of this growth occurring in the last six months [2]. - J.P. Morgan revised its Q4 net subscriber additions estimate to 10 million, up from 9 million, supported by improved global download volumes and daily active user trends [4]. - Netflix reported Q3 earnings per share (EPS) of $5.40, exceeding expectations of $5.09, and revenue of $9.82 billion, slightly above forecasts [12]. Advertising Revenue and Strategic Shifts - The introduction of the ad-supported plan at $6.99 per month has significantly contributed to revenue growth, targeting budget-conscious viewers [7]. - Analysts view the shift to an ad-supported model as a catalyst for financial growth, with Citi raising its price target for Netflix to $920 due to growing investor confidence in this tier [8]. Content and Engagement - Netflix's ability to deliver compelling content, such as "Squid Game," which attracted over 142 million households and generated an estimated $900 million in impact value, is crucial for subscriber engagement [9]. - The company's first live sports broadcast attracted 65 million viewers, boosting its market cap by $25 billion, with plans for future live sports events [10]. Market Outlook and Future Potential - Analysts expect Netflix's focus on advertising revenue, monetizing password sharing, and unique content experiences to drive sustained growth, with predictions of the company potentially becoming a trillion-dollar entity [13].