Netflix shares posted one of the strongest gains in the S&P 500 index on the New York Stock Exchange on Tuesday, as analysts at UBS raised their guidance for the streaming giant.

In a note, UBS stresses that the commercial dynamism of the Californian group, which attracted more than 29 million new subscribers in 2023, should enable it, taking into account its price increases and the arrival of advertising, to accelerate its growth.

The research firm says it expects sales growth of 15% this year, compared with 7% in 2023, followed by average annual growth of 13% between now and 2027.

At the same time, analysts are forecasting a three-percentage-point improvement in operating margin over the period.

Against this backdrop, UBS expects free cash flow (FCF) to rise by 20% a year, rather than 18% each year, which in its view should encourage the launch of further share buybacks.

The research firm, which is Buy on the stock, has accordingly raised its price target from $570 to $685.

At 10:45 a.m. (New York time), the stock was up 1.5%, while at the same time, the S&P index was virtually unchanged.

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