Story
Netflix Stock Gains After Deutsche Bank Upgrades to 'Buy'
Summary
Shares of the streaming giant rose after Deutsche Bank upgraded the stock to 'Buy' from 'Hold,' setting a $95 price target and citing a valuation opportunity following a prolonged selloff.
Netflix (NFLX) shares climbed in pre-market trading after Deutsche Bank upgraded the stock to 'Buy' from a previous 'Hold' rating, providing a key catalyst for the streaming company.
Upgrade Details
In a note to clients, Deutsche Bank set a new price target of $95 for Netflix shares, a level that implies significant upside from its recent trading range. The bank's bullish call comes after a steep, multi-month decline that has pushed the stock near the lower end of its 52-week range of $65.08 to $124.86.
The upgrade is likely supported by Netflix's underlying fundamentals. The company's management has guided for approximately 12% revenue growth in the third quarter and is targeting more than 20% operating income growth for the full year.
A Contrarian Stance
Deutsche Bank's move represents a contrarian view among analysts, some of whom have recently grown more cautious. Last week, HSBC downgraded Netflix to 'Hold', citing concerns over weakening subscriber engagement.
AdEarlier this month, Wells Fargo issued a sell-equivalent rating on the stock. The firm pointed to a perceived lack of breakout content as a key factor weighing on the company's shares.
Market Reaction and Valuation
Following the upgrade, Netflix stock rose 1.4% in pre-open trading. The move offers a signal to investors that the stock's prolonged selloff may have created a more attractive valuation.
Other metrics also suggest potential upside. According to Investing Pro, the stock's fair value is estimated at $84.98. The broader market provided a neutral backdrop for the move, with major indices trading nearly flat.
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