Netflix (NASDAQ:) reports next week. Street analysts expect EPS to be $2.90 for sales exceeding $7.93 trillion.

Eric Sheridan, a Goldman Sachs analyst, lowered the target price to $420.00 per Share from $450.00 for the Neutral-rated NFLX shares. This was to reflect the lower estimates (from 21 million to 17 millions in 2022 net additions) and to continue margin pressure.

“In order to get more constructive on NFLX, we continue to be focused on post-pandemic normalization, a lessening of media consumption competitive intensity, clearer line of sight into more moderate content spend growth and/or sustainable FCF generation that can fund share buybacks,” Sheridan said in a client note.

Similarly, KeyBanc analyst Justin Patterson has reiterated a Sector Weight rating on Netflix ahead of a potentially “noisy” report. Globally, 2022E/2023EEPS were lowered by the analyst at 1% and 6.6% respectively.

“We believe 1Q paid net adds benefited from a stronger content line-up in Asia, which should partially offset a ~1M drag from Russia, resulting in our new estimate of 2.1M (prev. 2.5M). We are positive but we think further FX headwinds and inflation will increase risk for 2022E/2023E revenue/EPS. Until these pressures subside, we remain skeptical operating margin can return to ~300 bps annual expansion,” Patterson wrote in a client note.

Netflix stock fell 1.6% pre-open Monday

By Senad Karaahmetovic