Shares of streaming giant $Netflix (NFLX.US)$ hit new 52-week highs Monday, which comes as the company recently shared an update on its ad-supported plan.
An analyst praises the company's recent updates and landing two National Football League games on Christmas.
The Netflix Analyst: Macquarie analyst Tim Nollen has an Outperform rating and a $685 price target on Netflix.
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The Analyst Takeaways: Recent deals with the NFL and advertising partnerships were well received by Nollen.
Nollen said that Netflix made three key announcements that are all linked. The three items were the NFL Christmas Day rights, highlighting $The Trade Desk (TTD.US)$, $Alphabet-A (GOOGL.US)$ and $Magnite (MGNI.US)$ as programmatic advertising partners, and updating that its ad-supported plan has reached 40 million monthly active users.
"The common theme here is advertising," Nollen said.
The analyst said Netflix is paying $75 million per game to host two Christmas Day games in 2024 and will get at least one game in each of 2025 and 2026.
"These are global rights, to be available to viewers on the ad tier in the 12 countries that have one, as well as on ad-free tiers. As such it looks like a good price compared with the $110 million Peacock paid to exclusively host an NFL playoff game this year."
Nollen said the NFL deal could help Netflix boost its advertising efforts and likely would not have been signed without having an ad-supported plan.
The partnerships with Trade Desk, Google and Magnite were not a surprise to the analyst.
"The company is building ad inventory faster than it can sell, and acknowledges that as it scales, there is a gap that may last for years."
Nollen said the recent moves by Netflix help support a positive view of the stock.
"The company is taking deliberate steps to improve its ad business, building what it can and partnering with the experts on what it cannot, to serve a large engaged audience."
NFLX Price Action: Netflix shares were up 3% to $640.82 on Monday. Netflix stock has traded between $344.73 and $644.37 over the last 52-weeks with the 52-week high set Monday. Netflix stock is up 83% over the last year.