Investors can expect a strong showing for Netflix during earnings season, UBS said. Analyst John Hodulik hiked his price target on Netflix to $525 per share from $390 ahead of its second-quarter results next week , forecasting a rosy report that will indicate accelerating growth in the second half. The new target implies upside of 19.3% from Tuesday’s close. Netflix shares rose 0.6% in the premarket. NFLX 1D mountain Netflix shares 1-day “We are raising estimates following positive data on paid sharing. Checks on engagement, downloads & search interest were all constructive for the newly launched paid sharing markets,” Hodulik wrote on Tuesday. “Along with better FX, we expect 2Q to beat mgmt’s guide (UBSe 5% rev/4% OI growth; prior 4%/2%) and still expect accelerating 2H growth.” Netflix shares are already outperforming this year, up by nearly 50%. However, the analyst’s rosy outlook stems from the introduction of paid sharing on the platform, which he says has shown positive growth and continues to make Netflix a “main beneficiary” as streamers prioritize profits. “We continue to believe paid sharing will drive 5%+ uplift to revenue and see the roll-out as key to driving scale in advertising with the growth in the ad-tier mix and better targeting,” Hodulik wrote. “Netflix eliminated its basic ad free tier in Canada ( & de-emphasized in the US), which we estimate could provide a 10% uplift to ARPU over time and should help scale the ad base faster than prior expectations.” Netflix is set to report results July 19. —CNBC’s Michael Bloom contributed to this report.
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