Netflix is rallying ahead of earnings
Netflix is up about 2.2% at $146 a share on Monday as it prepares to release its first quarter results after the closing bell.
Wall Street estimates earnings of $0.38 per share on revenue of $2.64, estimates provided by Reuters show.
The company is projected to add 5.3 million subscribers for the first quarter.
Last quarter, Netflix gained 7.1 million new users. However, Credit Suisse believes the company has been facing the reality of a more saturated US streaming market and is now pivoting more towards the rest of the world. Credit Suisse notes:
Credit Suisse is raising their price target from $143 to $144. However, the bank is more cautious on Netflix than they have been in the past, maintaining a "Neutral" rating on the stock and noting several headwinds including:
- Slower-than-expected rate of consumer adoption in any of the launched regions
- Faster-than-expected adoption of competitive offerings
- As Netflix becomes more global in its reach, the strengthening of the USD versus major currencies can also exert a headwind.