'New Version' of Netflix Lures Wall Street Bulls Back to Stock

A slew of bullish calls on Netflix Inc. from “back on track” to “rise of a new version” by Wall Street brokers confirm that a change in tack and rebound in user growth are likely to set the stock off to a sustainable recovery.

Shares in the video streaming giant surged 14% Wednesday, set for its biggest jump since January 2021. JPMorgan Chase & Co., Deutsche Bank AG and KGI Securities Co Ltd upgraded their recommendations on the stock, while at least a dozen other analysts boosted their target price. Netflix shares have lost over 60% this year.

An upcoming advertising-supported streaming plan and crackdown on password-sharing as well as a cut in content spending have been some of the drivers behind a 45% rally in the stock from its May 11 low. Though the company’s user base isn’t growing at the pace that it was a couple years ago, the world’s most popular streaming TV network is back on a positive trajectory.

Netflix added 2.4 million customers in the third quarter, exceeding analysts’ expectations and said it expects to add another 4.5 million in the current quarter.

The company “may be getting back on track in terms of content consistency, & it carries good momentum into 4Q,” said JPMorgan Chase’s Doug Anmuth, in a note on Wednesday. Anmuth returned to an overweight rating on the stock, six months after downgrading it to neutral.

“Thank God we’re done with shrinking quarters,” Netflix co-founder and Chairman Reed Hastings said during a webcast interview with Anmuth on Tuesday.