Netflix could have a strong 2023 thanks to its newly implemented ad-supported video tier, Wells Fargo said Friday. Analyst Steven Cahall upgraded the streaming giant to overweight from equal weight. He also hiked his price target on the stock to $400 per share from $300. The new target implies upside of nearly 29% from Thursday’s close. “After a period of turmoil around slowing subscribers and revenue growth, NFLX is using every arrow in the quiver,” Cahall said in a note. “Our deep dive into NFLX sees content improving churn, while AVOD [advertising-based video on demand] and paid sharing improve estimates.” The analyst sees revenue growth of 7% in 2023, noting that sales “should benefit from advertising, paid sharing, and lower SVOD [subscription video on demand] churn/pricing post the AVOD launch. Calling the NFLX quarters will remain a challenge, but we think the long-term setup is more constructive.” Netflix rolled out its first ad-supported subscriber tier last month at a $6.99 monthly rate in an effort to turn around one of its stock’s worst years on record. The streaming stock is down 48.5%, on pace for its third-worst annual performance ever. The stock has been pressured in 2022 by growing competition in the streaming sector. The company also reported earlier this year its first quarterly subscriber loss in more than a decade. Now, however, Cahall thinks “NFLX is going to be a more stable grower on subscribers with the COVID digestion behind it and new arrows in the quiver from AVOD and paid sharing.” Paid sharing refers to the company’s crackdown on password sharing — another potential revenue booster. Netflix shares ticked higher by 2% in the premarket. — CNBC’s Michael Bloom contributed reporting.