By Sam Boughedda
Investing.com -- Netflix Inc (NASDAQ:NFLX) shares are rising in the early part of Wednesday's session after the company was upgraded by Wedbush analyst Michael Pachter.
The analyst upgraded shares of Netflix to Neutral from Underperform, maintaining a $342 price target.
Pachter pointed to the company's recent sell-off as a reason for the upgrade, telling investors in a note that it “reflects that Netflix investors have begun to appreciate that the company’s long-term prognosis is as a low growth, extremely profitable enterprise.”
He did, however, add that he doesn't expect a “significant share price appreciation in the near-term.”
“Netflix’s first mover advantage and large subscriber base provides the company with a nearly insurmountable competitive advantage over its streaming peers. Netflix appears to have hit a ceiling on subscribers in UCAN, and is pulling new levers to lower churn," the analyst stated, reiterating previous comments from January.
Adding that "subscription price increases should fuel additional content production and growth in other regions.”
While Wedbush believes content dumps will keep customer churn high, Pachter feels Netflix is aware of the situation after the company split the Stranger Things series into two half-seasons.
He concluded that Netflix will "deliver sustainable profit growth as long as it is able to continue raising subscription prices, but competition may create a price ceiling."
After a sell-off that has seen it fall 43% in 2022, Netflix is trading 3.8% higher Wednesday.