Netflix earnings: Can the streaming giant clear a high bar of investor expectations for a change?

Netflix Inc. has a tough task when it reports fourth-quarter results on Jan. 17, after the market close — satisfy investor expectations that are running high, and accelerating.

When the streaming video giant faced a similar task, it failed. But there’s reason to believe this time will be different.

Netflix’s stock NFLX, +3.98% ran up 4.2% in afternoon trade Friday, putting it on track for the 10th gain in 12 sessions. It has rocketed 45% since closing at an 11-month low on Dec. 24.

Helping fuel the optimism was the December release of the movie “Bird Box,” starring Sandra Bullock, which was viewed by a record 45 million subscribers in the first week.

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And on Friday, Raymond James analyst Justin Patterson upgraded Netflix to strong buy from outperform on Friday, saying the company’s content investments and film strategy are “paving the way to material profitability.” He boosted his stock price target to $450 from $435, implying a further rally of 33% from current levels.

The last time investors were so optimistic ahead of results was July 2018. The stock had run up over 40% to a record high in three months just prior to the earnings release.

Just as investors’ expectations were at their highest, UBS downgraded Netflix to neutral from buy, with analyst Eric Sheridan has said the long-term growth potential was already reflected in the stock price, but the risks associated with competition and free cash flow burn were not.

He was right to temper enthusiasm, as a week later, Netflix beat profit expectations but misses on revenue and the all-important subscriber additions sent the stock tumbling. Read more about Netflix’s Q2 earnings.

See related: Is Netflix stock falling down a mountain, or just tripping

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