Morgan Stanley Reiterates On Netflix, Ups Estimates

In a research note out Tuesday, analyst Benjamin Swinburne of Morgan Stanley reiterated his $620 price target and Netflix, Inc. NFLX, maintained his Overweight rating and upped 2025 EBIT to $7.4 billion from his previous estimate of $6.3 billion. He also laid out three scenarios:

1. Bull Case ($775 PT)-Successfully leveraging investments to drive sub growth,reaching 200M+ global streaming subs by 2025.
2. Base Case ($620 PT)-Domestic subs reach~65M and international subs (ex-China) grow to~100M by 2025E.
3. Bear Case ($345 PT)-Elevated churn domestically and challenging penetration into international markets.

"We reiterate our OW,and raise estimates and our 1-yr fwd PT to $620.While near-term upside is likely muted( +67%YTD), we remain bullish on the long-term oppty for shares. In particular, Netflix's global moat is deepening and we believe shares still do not reflect potential pricing upside."

Shares of Netflix ticked up higher in the premarket, trading at $568, implying a 9.15 percent upside to the $620 price target.