Netflix is set to increase prices in 2024 while maintaining its growing share of TV viewership.

FUNDAMENTAL OVERVIEW:

Analysts at UBS Securities anticipate that Netflix will raise prices on its streaming plans in 2024. This strategic move is projected to boost the company’s revenue and earnings growth, further solidifying its significant share of overall TV viewership.

In a research note dated February 27, UBS analysts led by John Hodulik stated, “We anticipate Netflix implementing rate hikes this year.” This, combined with increased revenue from its ad-supported tier and substantial subscriber additions, is projected to drive the company’s total revenue growth to 15% in 2024, a notable increase from the 7% growth in 2023 according to analysts’ estimates.

In October of the previous year, Netflix raised the cost of the Basic plan from $9.99 to $11.99 per month in the U.S., and similarly adjusted prices in the U.K. and France. While there is no official announcement regarding subscription price hikes in 2024, Netflix executives have indicated that rate increases are being considered.

During the Q4 2023 earnings call, Netflix co-CEO Greg Peters mentioned that in the previous year, the streaming platform had mostly refrained from implementing price hikes as it introduced the paid-sharing program. This was considered a substitute for price increases. Now that the rollout is complete, the company is returning to its usual strategy of implementing price increases. Notably, Netflix has already implemented price increases in the U.S., U.K., and France.

In their report, the UBS team increased their 12-month price target for Netflix shares, raising it from $570 to $685 per share while retaining a “buy” rating for the stock. During midmorning trading on Tuesday, Netflix shares experienced a 1.5% rise, reaching over $596 per share.

NETFLIX TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Netflix is trading within an up channel.

Netflix is positioned above all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.

Immediate Resistance level: 604.21

Immediate support level: 583.33

HOW TO TRADE NETFLIX

After experiencing a decline, Netflix has reversed its trend and has been consistently trading higher, forming a series of higher highs. Presently, Netflix is hovering around its weekly resistance, suggesting a potential downturn and correction. In this scenario, there might be an opportunity for a buying strategy during a dip in the market.

TRADE SUGGESTION- LIMIT BUY– 566.99, TAKE PROFIT AT- 603.30, SL AT- 547.02.