UBS bumps PT on Netflix by $215 as momentum to persist on content, pricing

Investing.com -- Netflix Inc (NASDAQ:NFLX ) is set to maintain strong operational momentum into 2025, benefiting from industry shifts and its robust content slate, UBS said in a note, raising its price target and estimates for the streaming giant.

UBS bumped its price target on the stock to $1040, from $825.

The brokerage sees Netflix as the main beneficiary of structural changes in the media landscape, with rivals cutting spending and consolidating. In contrast, Netflix's sustained investment in original content, including new seasons of Stranger Things, Squid Game, and Wednesday in 2025, will support subscriber growth and monetization through pricing and ad revenue.

“The wider DTC environment continues to shift in Netflix's favor with peers rationalizing spend and raising price. Industry consolidation would only accelerate these trends and rationalize the market,” analyst said.

UBS expects Netflix to add 32 million subscribers in 2024, up from 30 million this year, with another 22 million in 2025. Price increases in select markets and a doubling of ad revenue next year will further boost growth, UBS said.

The note highlighted Netflix's ability to grow revenue faster than content spending, enhancing free cash flow and operating leverage.

Source: Investing.com