Bearish Netflix analyst predicts earnings will beat the Street next week, upgrades stock

The Netflix app on an Apple iPad mini tablet computer.
Daniel Acker | Bloomberg | Getty Images

Earnings from Netflix on Wednesday are likely to top Wall Street's expectations on strong international subscriber growth, according to a Deutsche Bank analyst, compelling him to raise his rating on the video-streaming company to hold from sell.

"Valuation is still aggressive, but 4Q [fourth quarter] results are likely to exceed guidance," equity analyst Bryan Kraft wrote in a note to clients Friday. "The key driver of the stock price around earnings reports has predominantly been subscribers."

In the last three months of 2016, Kraft believes Netflix added 4.35 million international subscribers, nearly 30 percent more than the company's guidance for 3.35 million subscribers. For all of 2017, Deutsche Bank predicts Netlix could add another 14.9 million subscribers globally.