Netflix ‘s stock will perform well going forward even without airing a major sporting event, according to CFRA. Analyst Kenneth Leon double upgraded the stock to buy from sell while raising the price target by $85 to $310. While the previous price target implied a downside of about 18% over where the stock closed Wednesday, Leon’s new target reflects the potential for a 12% upside. Leon’s upgrade follows news last week that Alphabet ‘s YouTube got the NFL’s Sunday “Ticket” subscription package in a $2 billion annual deal . Streaming giants have attempted to air sporting events in a bid to gain market share, but Leon said Netflix does not need to compete in the space given its dominance elsewhere. “We agree that NFLX does not need a major sports event or sponsor, which risks a big loss leader,” Leon said in a Wednesday note to clients. “We think it will be difficult for competitors to catch NFLX, one of the few profitable streaming providers with global scale.” He said the streaming company will be helped by its new, cheaper tier that includes advertisements , and its efforts to crack down on password sharing . Leon said its “best-in-class” search and personalization, on top of the new original content, will also improve subscriptions and reduce churn. Leon applied a wider risk premium and a forward total-enterprise-value-to-EBITDA ratio of 21.4, which he noted is still below historical levels. He kept per-share earnings expectations in line with consensus estimates for 2022 and 2023. The stock rose 5.3% in midday trading Thursday, but has dropped 52% this year. Just 49% of analysts rate the stock a buy or overweight, according to FactSet. But the average price target is slightly below Leon’s at $302.89, which implies a 9.4% upside. — CNBC’s Michael Bloom contributed to this report.
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