Bearish Goldman Sachs boosts Netflix estimates amid 'stark' dollar turnaround
Ethan Miller/Getty Images News

Goldman Sachs has boosted estimates for Netflix (NASDAQ:NFLX) to account for a weaker dollar, though it's keeping a Sell rating even as the rest of Wall Street gets more upbeat on the streamer's prospects.
The last quarter has brought a "stark reversal" in performance of the dollar - it's fallen 7% since Netflix's last earnings report - and so the firm is adjusting accordingly, analyst Eric Sheridan and team said.
It's raising forward average revenue per user estimates as well as operating income.
Shares have outperformed on investor confidence in the company's twin initiatives of an ad-supported tier and a crackdown on password sharing, the firm notes, along with a return to a "compelling cadence of content launches" in the second half of 2022.
Industry conversations are supportive of Netflix's "crawl, walk, run" approach to the ad tier, Sheridan said, though he's reiterating the house view that while a host of large-scale brand advertisers will adopt the offering, the current framework (large minimum commitment, above-industry pricing and limited measurement) will "cap the advertising dollar opportunity."
Goldman is also concerned that the new offerings could cause "spin down" into lower prices by users in any potential recession.
Those dollar moves are boosting the base economics, though. So while maintaining a Sell rating, Sheridan and Co. are raising Netflix's (NFLX) price target to $225 from $200, now implying 31% downside.
Netflix (NFLX) was among the outlier gainers in the Entertainment space Tuesday, up 3.9% - set to get back on the upswing after Monday's fractional decline broke a six-session winning streak (see historical prices here).