Netflix should have more steam in its rally thanks to the advertisement-enabled tier, Citi said. Analyst Jason Bazinet reiterated his buy rating and added a positive catalyst watch ahead of Netflix’s quarterly earnings report expected in July, pointing specifically to the ad tier’s success. Bazinet also raised his price target for shares by $100 to $500, which now implies a potential upside of 16.3%. “We are more bullish on the likely success of the Ad Tier,” he said in a note to clients Wednesday. Netflix shares were up 1.8% in premarket trading Thursday. The stock has surged more than 45% this year as investors moved past 2022’s selloff. NFLX YTD mountain Netflix, year to date Bazinet now expects Netflix will get 82 million incremental subscriptions from the lower-cost, ad-enabled tier. That translates to about $10.6 billion in incremental revenue. And it’s better than the firm’s earlier forecast of 66 million in September 2022. The ad tier costs $6.99 per month, making it $3 per month cheaper than the “basic” plan, the next least expensive option, at the time of its launch. Netflix has said there would be around four to five minutes of advertising for every hour of content. Strong expectations for the ad tier pushed Bazinet to raise his target, even as the crackdown on account sharing without paying extra — the streaming giant’s other big recent change — is still expected to bring little upside to the stock. That’s because the firm has believed a revenue decrease from consumers opting for lower-cost plans with less simultaneous streams as a result of the crackdown would offset any gains from people who actually paid to share an account. Netflix began the crackdown in the U.S. in May after doing it in some international markets earlier this year. Altogether, he said it makes sense that the two were rolled out around the same time because having the cheaper option as sharing becomes more difficult makes the aggregate impact positive for the company. Looking ahead to second-quarter earnings, Bazinet said management should provide meaningful updates on its ad tier given that it’s been two full quarters since the launch. He said shares should move positively on any upbeat commentary on the rollout. Quarterly results should also be helped by the password sharing crackdown, which could in turn lead to more ad-tier subscribers. — CNBC’s Michael Bloom contributed to this report.