Netflix Remains Undervalued, Engagement Concerns Overblown: Morgan Stanley

Morgan Stanley analysts said Netflix (NFLX) remains undervalued, arguing that concerns over user engagement are overblown and the stock's current valuation does not fully reflect its long-term growth potential.

Rating Change

The report did not specify a change in rating or price target, but emphasized that the current valuation does not capture the company's long-term growth prospects.

Analyst Rationale

The analysts believe investor worries about slowing subscriber growth or declining watch time are unfounded. They noted that Netflix continues to invest in original content and international expansion, which should help retain and attract subscribers.

Context

The positive view comes amid intense competition in the streaming space from platforms like Disney+ and HBO Max. Netflix shares have declined 5% over the past month but remain up 12% year-to-date.

What to Make of It

While Morgan Stanley's outlook is bullish, investors should watch upcoming earnings and subscriber data to see if engagement concerns materialize in financial results.