Netflix stock rose above a key support level Wednesday after getting an upgrade from a Wall Street analyst.
Loop Capital Markets analyst Alan Gould upgraded Netflix to buy from hold and raised his price target to 1,350 from 1,150.
On the stock market today, Netflix stock rose 2.3% to close at 1,228.50. With the advance, Netflix climbed above its 50-day moving average line in a positive technical sign. It dropped below that line last Thursday.
In a client note, Gould said he turned positive on the internet television network based on its strong user engagement and prospects for higher long-term profit margins.
Gould called the company's third-quarter subscriber engagement "exceptional" with such popular content as "Squid Game," "Wednesday" and "KPop Demon Hunters."
Further, Netflix has a "strong Q4 content slate" on tap, he said. Key fourth-quarter releases include the final season of "Stranger Things," "The Diplomat" season three, a Christmas NFL doubleheader, Guillermo del Toro's "Frankenstein," "Troll 2" and the next "Knives Out" mystery film.
Netflix Stock Is In Flat Base
Netflix "has won the streaming wars, and even with stronger competition from David Ellison's PSKY or PSKY/WBD, we believe NFLX has the global customer and content scale, technological advantage and cash flow to maintain its growth and dominance."
Paramount Skydance is rumored to be preparing a bid for Warner Bros. Discovery. Such a deal would put streaming services Paramount+ and Warner's HBO Max in the same company.
"We believe the Street is overly concerned with competition from a well-financed, and aggressively spending, Skydance," Gould said.
Netflix stock is in a 12-week flat base with a buy point of 1,341.15, according to IBD MarketSurge charts.
Further, Netflix stock is on IBD's Leaderboard.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
