Netflix predictions take center stage as streaming pioneer prepares to launch ad-supported tier

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Oct 17 (Reuters) – Netflix Inc’s subscriber growth forecast () will be front and center when it releases third-quarter results on Tuesday, with the streaming pioneer set to launch an ad-supported plan to better compete with rivals such as Disney+ and HBO Max.

Last week, Netflix announced it would launch the plan in November at $6.99 per month, well ahead of its previous early 2023 estimate and Disney+ rollout in December. read more read more

Analysts said the long resisted move will drive growth at a time when the connected TV advertising market is booming.

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“As the industry’s largest player, we expect Netflix to generate strong demand from advertisers looking for the service’s reach and younger demographics,” the company said. UBS Equities brokerage.

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THE CONTEXT

Netflix has increased the prices of its plans and also cracked down on password sharing, while focusing on its mobile gaming efforts to maintain growth.

Analysts, polled by Refinitiv, expect Netflix to add just over one million subscribers in the third quarter. The company behind hits such as “Squid Game” and “The Crown” lost more than a million customers in the first half of 2022.

“This (ad) is an important move that puts Netflix in direct competition with free-to-air broadcasters around the world,” said Paolo Pescatore, analyst at PP Foresight.

“That could turn out to be the final nail in the coffin for these players.”

Netflix could generate net ad revenue in the United States and Canada of $1.7 billion and international net ad revenue of $1 billion in 2025, according to brokerage firm MoffettNathanson.

FUNDAMENTALS

* Analysts estimate Netflix’s third-quarter revenue will rise 4.8% to $7.84 billion when the results are released Oct. 18.

* Earnings per share is estimated at $2.13 – Refinitiv

* The stock has lost about 59% of its value this year, but has risen 14% since the company reported second-quarter results

WALL STREET FEELING

* 13 out of 43 analysts rate the stock “buy” or higher, while 24 rate it “hold” and six rate it “sell” or lower

* The median price target is $240; at the start of 2022, the target stock price was $673.36

*Trade Netflix at $245.04

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Reporting by Eva Mathews and Savyata Mishra in Bengaluru; Editing by Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.

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