TD Cowen analysts are optimistic about Netflix's (NASDAQ:NFLX) earnings, citing strong subscriber growth and a burgeoning ad tier as key drivers.
The bank projects Netflix to add 5.19 million paid subscribers in Q2 2024, exceeding analyst consensus of 3.72 million. This growth is attributed to both paid-sharing initiatives and momentum in the ad-supported tier (AVOD).
According to a recent TD Cowen consumer survey, Netflix remains the top choice for living room viewing, highlighting its continued dominance in the home entertainment space.
“We’ll look for color on AVOD tier, monetization & margin trends,” the analysts note, emphasizing the importance of details surrounding the ad tier's performance during the upcoming earnings report on July 18th.
Encouraged by these trends, TD Cowen raised their price target for Netflix to $775 from $725, reiterating a Buy rating. They also increased their long-term subscriber estimates, reflecting confidence in Netflix's ability to sustain growth.
While YouTube is gaining traction in mobile, TD Cowen believes Netflix's “broad catalog across multiple genres creates a durable advantage over time.”