Here’s Why a JPMorgan Analyst Is Bullish on This Unexpected Stock
Written by
Vance Cariaga
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Amber Barkley
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Considering how much the stock markets have tanked since President Donald Trump announced his sweeping tariffs on April 3, you might be skittish about putting money into equities right now.
But if you do want to take the plunge, at least one Wall Street analyst recommends a company you might not expect: Netflix.
Netflix Rating and Performance
In late March, JPMorgan analyst Doug Anmuth maintained his “overweight” (buy) rating on Netflix stock with a $1,150 price target. At the time, that target implied a 20% increase from Netflix’s then-closing price of $960.29, Barron’s reported.
Netflix shares have since fallen about 7% and currently trade near $890. Like most stocks, Netflix has been hammered by a tariff-related market selloff that saw the S&P 500 shed more than $5 trillion in two days — its biggest drop since the early days of the COVID-19 pandemic, Reuters reported.
If Trump’s massive trade war leads to a recession — as some economists fear — the fallout could hit ad revenue at Netflix and other streaming services. But for now, Netflix appears to be on pretty steady ground, according to Anmuth.
“We believe Netflix should prove relatively defensive against macro headwinds given strong engagement, affordability of the service with high entertainment value, and the low-priced ad tier which makes Netflix widely accessible,” Anmuth wrote in a note to clients.
Netflix also benefits from “healthy double-digit revenue growth and continued operating margin expansion,” Investor’s Business Daily reported. In addition, Anmuth cited Netlfix’s “strong leadership position” in the streaming/entertainment sector.
Recent Growth
The company’s shares popped in late January after it posted fourth-quarter results that topped Wall Street expectations. It surpassed 300 million paid memberships during the quarter and added a record 19 million subscribers, CNBC reported.
Neftlix management cited several reasons for the growth, including improved content, Q4 seasonality and a rise in “extra member” accounts.
“We really have built the business on variety and quality across countries, across regions, across genres and really focused year-round on having a very strong slate of programming for our members,” said Netflix co-CEO Ted Sarandos during a January investor call.
Netfix’s fourth-quarter earnings came in at $4.27 a share, up from $2.11 the previous year and above consensus analyst estimates for $4.20 a share. Quarterly revenue gained 16% to $10.25 billion, topping estimates for $10.11 billion. The company saw paid memberships rise to 301.63 million vs. estimates for 290.9 million.
Looking ahead, analysts expect Netflix to benefit from the return of a couple of hit series in 2025 — “Stranger Things” and “Wednesday” — as well as the final season of “Squid Games,” another hit series.
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