Netflix shares climb more than 7% as Cowen sees heavy advertising upside
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On a strong day for the stock market, Netflix (NASDAQ:NFLX) was among the top gainers on the S&P 500 (SP500), as its shares climbed more than 7% amid renewed positivity from Cowen analyst John Blackledge.
Prior to the start of trading, Blackledge reiterated his outperform rating on Netflix's (NFLX) stock after poring over high-profile plans for the streaming pioneer to add advertising support as a subscription option.
Blackledge's survey figures that in 2023, an advertising service tier might add some 4 million members to Netflix's (NFLX) home U.S. and Canada market where growth had been slowing. 
As for revenue, Blackledge estimated those new subscribers could give Netflix (NFLX) an average revenue per member of $17 per month, split between ad revenue of $10 per month and subscriber revenue of $7 per month. Blackledge added that if 41% of Netflix's (NFLX) existing members switch to an ad tier that implies the company could see a blended average revenue per user figure in the UCAN--U.S. and Canada--market that is actually up 8% over the first-quarter levels in that region.
That points to "significant" revenue gains, according to Blackledge, who estimated that such potential ad tier members could generate UCAN revenue of $881M in 2023, or 6% beyond his current forecast. 
This week, Netflix doubled down on the success of its biggest hit, as it announced a second season of thriller series Squid Game, as well as a reality competition program based on the series.