Why Netflix Stock Is Gaining During Another Tough Session for the Market

Netflix (NASDAQ: NFLX) stock was trading 1.8% higher as of 12:45 p.m. ET Monday, despite a broad sell-off in the market that pushed the S&P 500 down by 2.7%. The streaming video stock had been up by as much as 4.7% earlier in the session.

Netflix rose thanks to a surge of bullish coverage from analysts following the first-quarter report it published last week, which featured better-than-expected sales and earnings, and a forecast for $8 billion in free cash flow this year. Despite macroeconomic concerns, investors are seeing promise in the streaming leader's outlook.

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Analysts warm up to Netflix despite macroeconomic volatility

Investment firms including Wedbush, Morgan Stanley, and JPMorgan cheered Netflix's results and guidance, and raised their price targets on the stock, which appears to be gaining favor as a growth play that could hold up well in the event of a recession.

The company delivered 12.5% sales growth and a big earnings beat in the first quarter, and for Q2, management expects that sales growth will accelerate to roughly 15%. The company also expects an approximately 33% operating income margin for the period -- a 6 percentage point year-over-year improvement.

For the full year, management's midpoint revenue target of $44 billion would amount to growth of roughly 13%. Meanwhile, the company expects its operating income margin for the year to come in at 29%. Powered by its strong profits, the streaming giant plans to continue buying back shares and making big investments in content.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.