Netflix gets an upgrade from Wolfe Research after big earnings report

Netflix’s strong fourth-quarter results has Wolfe Research upbeat on the stock’s future. Analyst Peter Supino upgraded Netflix to outperform from peer perform in a research note, a day after the company reported quarterly results that beat expectations , with the company also announcing paid memberships topped 300 million. Supino has a $1,100 price target on shares, which indicates 15.3% upside from Wednesday’s close. “While premium valuation gives pause, our expanded valuation comparison analysis demonstrates the scarcity and preciousness of Netflix-like growth, scale and profitability,” Supino wrote. When it comes to content monetization, Netflix has the most reach and engagement per user compared to its peers, he added. Although the analyst noted that sales growth will likely slow over the next two years, he believes the company’s widening growth strategies will lead to a “gentler slowdown.” “With accelerating returns on capital & superior unit economics, we think it could be a very, very long time before Netflix reaches a terminal growth rate,” Supino said. Netflix shares rallied more than 9% on Wednesday on the back of its strong fourth-quarter reports — marking their best day since Oct. 18. The stock has been on a tear lately, soaring more than 93% over the past year. Analysts are generally bullish on the stock, with 32 of 48 who cover it rating it as a buy or strong buy, according to LSEG.