Netflix stock climbs higher on bullish Wall Street sentiment: 'Poised to outperform'

Netflix (NFLX) stock edged higher on Tuesday after Bank of America boosted its price target, citing last week’s positive, third-party data surrounding the company’s crackdown on password sharing.

“We estimate password sharing could represent a $2 [billion] incremental annualized [revenue] opportunity,” Bank of America analyst Jessica Reif Ehrlic wrote in a new note to clients, adding the streamer’s ad-supported tier will serve as another viable revenue driver.

The analyst raised her price target to $490 a share, up from the prior $410. That represents roughly 15% upside based on current levels.

Netflix stock rose 2% in morning trading.

Bank of America now joins Pivotal Research, Wells Fargo and JPMorgan in raising their respective price targets on the stock. Pivotal Research has the highest price target on Wall Street at $535 a share. Wells Fargo and JPM have current targets of $500 and $470, respectively.

“We increasingly view NFLX’s crackdown on password sharing and the AVOD opportunity as inextricably linked,” Ehrlic wrote. “At the $6.99 price point, the ad-supported tier provides an attractive low-priced option for ‘borrowers’ who still wish to access the Netflix service. In our view, the broader crackdown on password sharing will be an accelerant to NFLX’s ad-supported tier.”

The analyst added she’s bullish on the ad opportunity for several reasons, including the tier’s ability to dwarf competition by increasing engagement and reaching across various demographic groups.

She added she’s confident in Netflix’s leadership team to scale the business through ads, in addition to healthy demand from ad buyers amid innovative offerings like the company’s top 10 list.

“Supported by its world-class brand, leading global subscriber base and position as an innovator we believe Netflix is poised to outperform,” she emphasized.

On Friday, data from analytics platform Antenna showed US sign-ups for the streaming service jumped by the most in at least four and a half years after the implementation of its controversial password sharing crackdown last month.

According to Antenna, between May 25-28 Netflix saw the four single biggest days for US signups since the firm began tracking this data in 2019.

The streaming service saw nearly 100,000 daily sign-ups on both May 26 and May 27, Antenna said, after Netflix broadened its crackdown to include the US and more than 100 other countries and territories on May 23.

“A Netflix account is for use by one household,” the company wrote in a blog post at the time of the US announcement. “Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday — and take advantage of new features like Transfer Profile and Manage Access and Devices.”

The company said users can share their account with someone who doesn’t live with them for an additional $7.99/month.

Netflix broadened its crackdown in early February to include countries like Canada, New Zealand, Portugal, and Spain, in addition to the test countries of Chile, Costa Rica, and Peru. It previously said “a broad rollout” of the policy would hit this quarter.

Netflix sees bullish Wall Street sentiment on heels of password sharing crackdown, ad tier rollout

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at

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