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Citi analyst Jason Bazinet reiterated a Buy rating and a $295.00 per share price target on Netflix (NASDAQ:NFLX) shares.
The analyst sees two options in front of Netflix: 1) introduce a lower priced ad tier, or 2) monetize account sharing.
“We believe an ad based tier – which we expect in 2023 – will allow Netflix to resume sub growth and help narrow the ~$5 billion gap between FCF and net income. Monetizing account sharing, on the other hand, is unlikely to improve beyond current levels,” Bazinet said in a client note.
A successful launch of an ad tier, coupled with a narrowing of the FCF vs net income gap, could help Netflix shares to recover and eventually reach Bazinet’s $295.00 price target.
Netflix share price closed at $187.44 yesterday.
