Netflix rises as Morgan Stanley boosts estimates on higher expectations
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Netflix (NASDAQ:NFLX) shares rose fractionally in pre-market trading on Monday as investment firm Morgan Stanley raised its estimates on the streaming media giant ahead of its July 19 earnings report.
Analyst Benjamin Swinburne, who has an equal-weight rating on Netflix (NFLX), now expects the company to add 2.2M subscribers in the second-quarter, up, from a prior 1.55M, due to "more modest churn" from the paid sharing announcements in the U.S. and Canada, as well as "solid" app download trends.
Swinburne also tweaked his estimates for the company's advertising initiative, as he now expects advertising supported subscriptions to be roughly 30M by the end of 2025, slightly lower than previously estimated. 
"In aggregate, we estimate Netflix will monetize 35mm new [households in the second-half of 2023], through a combination of core net adds, extra members, and paid sharing net adds," Swinburne wrote in an investor note. "After reviewing the extra member pricing, we are shifting more of our paid sharing benefit from extra members to net adds especially in [U.S. and Canada]."
Swinburne raised his per-share price target to $450 from $350 as a result of the increased estimates.
A consensus of analysts expect the Los Gatos, California-based Netflix (NFLX) to earn $2.85 per share on $8.27B in revenue during the second quarter.
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