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Netflix stock jumps after analysts raise price targets

JPMorgan and Wells Fargo analysts both raised their price targets for Netflix, citing the streaming platform's new ad-tier performance. Yahoo Finance Live takes a look at how the streamer's shares are trading.

Video transcript

BRAD SMITH: Netflix. Who doesn't like to watch Netflix and get a good gazpacho going? They're getting some love today with JP Morgan raising its price target on the stock to $470 from $380. Wells Fargo also raised its target price to $500 from $400.

You can see shares of the streamer popping on that news. JP Morgan analyst saying that the streamer's paid sharing program will boost revenue over the next few years. Shares higher off of this report by about 4 and 1/2% here, as we begin to trade this morning.

JULIE HYMAN: Yeah there seems to have to do with the new ad-supported tier. I'm just looking at the Wells Fargo note here, which cites that and talks about brands hooked on linear. That they like the ad. Basically, they like the ad platform here.

They talked about how many impressions those ads are creating for these advertisers. And they also said, they're paying far higher for sports and prime time for a mix of quality and quantity. So basically, it seems like that this is going to be in the eyes of the Wells Fargo analyst, as well as JP Morgan, who's making similar comments that ad supported tier is really going to be a win for Netflix.

BRAD SMITH: Yeah, the JP Morgan commentary and the remodeling of how they're looking at that ad supported tier as well. They're essentially looking for Netflix to be able to cash in on 100 million borrowers-- well, of its borrowers there. And also expecting to see 14 million by the end of this year, 26 million at end of 2024. And then by the end of 2025, 33 million there.

So that modeling is going to be interesting to see how that comes to fruition from Morgan's side. But, of course, that would perhaps create some greater margins and revenue growth for the company as well.