Truist trims Netflix target, but sees possible first-quarter subscriber gains
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A preview of first-quarter results for Netflix (NASDAQ:NFLX) has led Truist Securities analyst Matthew Thornton to trim his price target on the company's stock while also taking into account some positives in app downloads and the impact of halting its service in Russia.
Thornton cut his Netflix (NFLX) target price to $409 a share from $470, but left his hold rating on the company's shares intact.
Thornton removed Russia from his Netflix (NFLX) business model starting April 1. An article in The Information estimated that Netflix's (NFLX) had between 1 million and 2 million paid members in Russia, and Thornton estimated that and app download share suggests the company has 1.3 million such subscribers.
Excluding Russia, Thornton said believes mobile app downloads suggest Netflix (NFLX) will surpass the consensus estimates of 2.5 million new subscribers when it reports its first-quarter results on April 19. Thornton said those estimates assume no spike in customer churn due to recent price increases.
Thornton said those numbers should incorporate some improvement in Asia Pacific and Latin America, and will be on only partly offset by Netflix's (NFLX) Europe, Middle East, and Africa, and U.S. and Canada regions.
As for Netflix's (NFLX) second quarter, Thornton said the company's slate looks "very solid" with the arrival of a new season of Stranger Things. But, consensus expectations for 2.6 million additions in that quarter look like a "slightly high hurdle" based on past seasonal guidance, according to Thornton.
Wall Street analysts currently expect Netflix (NFLX) to report a profit of $2.93 a share, on $7.95 billion in revenue, when it delivers its first-quarter results next week.