By Sam Boughedda
UBS analyst John Hodulik maintained a Neutral rating on Netflix (NASDAQ:NFLX) while cutting the firm's price target to $198 from $355 per share in a note to investors Friday.
The analyst stated the firm expects the streaming giant's second-quarter subscriber declines to be in line with guidance while providing a cautious second-half outlook.
"We believe subs tracked in-line with mgmt's guide for 2.0M losses in 2Q, driven by LSD declines in gross adds & higher churn following price increases in UCAN/parts of Europe," said Hodulik.
He added that while the year's second half is "seasonally stronger," they expect cautious guidance due to macro uncertainty.
"We look for 1.3M (NYSE:MMM) adds in 3Q (prior 2.8M; street 1.9M), down from 4.4M in 3Q21 given a thinner content slate, and 2.8M for the yr (prior 5.4M; street 5.7M)," wrote Hodulik. "We expect UCAN ARPU growth to accelerate in 2Q given a full qtr's benefit of price increases while trends in LatAm/EMEA remain healthy (ex FX) and Apac sees pressure following the Dec. price cut in India. We are lowering 2Q est. to reflect FX pressure and expect 1-3% downside to mgmt's 2Q outlook. We look for 7.3% rev growth in '22E (prior 8.1%) while growth initiatives & FX pressure drive just 1.8% yoy EBITDA growth (prior 3.4%) and 19.3% EBIT margins, down 160 bps yoy."