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Netflix Inc (Nasdaq: NFLX) has already gained over 90% this year but a Morgan Stanley analyst remains convinced that the stock has more room to the upside.

Netflix stock could climb to $550

Benjamin Swinburne reiterated his “overweight” rating on the streaming giant this morning but raised the price target to $550 that suggests about a 17% upside on its previous close.

The analyst is constructive on Netflix stock primarily because he expects the company to optimally execute on its growth initiatives which include the advertising tier and paid sharing.

Swinburne sees the overall risk-reward as “attractive” in $NFLX. In October, Netflix reported better-than-expected earnings on a per share basis for Q3.  

The mass media company ended its third quarter with over 247 million subscribers versus about 244 million expected.

Netflix is unmatched in free cash flow

Swinburne recommends owning Netflix stock also because he has confidence in the company’s return on content spending.  

The Nasdaq-listed firm is unmatched in terms of scale and free cash flow that enables it to explore new business opportunities such as gaming which offers “upside in the future”, as per the Morgan Stanley analyst.

On Monday, Benjamin Swinburne “modestly” raised his forecast for net adds in 2024 as well. He likes Netflix Inc as it has started hedging currency that he’s convinced will eventually result in a benefit to earnings.

We continue to forecast a 25% to 30% earnings per share compound annual growth rate over the next four years.

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