On Monday, UBS analyst reaffirmed a Buy rating on Netflix (NASDAQ:NFLX) stock, with a price target of $1,040.00. According to InvestingPro data, Netflix shares have delivered an impressive 86.4% return year-to-date and are currently trading near their 52-week high of $941.75. The streaming giant, now valued at approximately $388 billion, maintains a "GREAT" financial health score.
The endorsement follows the streaming giant's recent success in broadcasting NFL Christmas Day games, which attracted approximately 24 million average viewers in the U.S. These figures were derived from a combination of Nielsen Fast Nationals, mobile and web data from Netflix, and NFL+ mobile viewing.
The viewership for Netflix's NFL games was notably close to the 28 million average viewers that ABC, CBS, and Fox garnered for their Christmas telecasts last year. Moreover, Netflix's numbers significantly surpassed the roughly 13 million average viewers for Prime Video's Thursday Night Football this season, which itself was an increase from about 10 million in its first year. The viewership also paralleled Peacock's Wildcard playoff game the previous year, which drew around 23 million viewers.
UBS analyst pointed out that although Netflix's viewership did not surpass traditional broadcast numbers, the platform is well-positioned to acquire additional sports rights in the future. This assertion is supported by Netflix's recent acquisition of the Women’s World Cup rights and its substantial subscriber base, which includes more than 280 million users globally and about 80 million in the U.S. This base significantly outnumbers the approximately 70 million linear TV subscribers, which are decreasing by about 8% annually.
The analyst suggests that Netflix's expanding reach and ability to secure popular sports content could lead to further price increases and bolster its advertising offerings. He maintained Buy rating and price target reflect confidence in Netflix's strategic direction and its potential for growth in the competitive streaming landscape.
While the stock is currently trading above its InvestingPro Fair Value, investors can access detailed valuation metrics, 18 additional ProTips, and comprehensive analysis through InvestingPro's exclusive research report, available as part of their coverage of 1,400+ top US stocks.
In other recent news, Netflix has been the focus of various analyst updates. KeyBanc Capital Markets has maintained an Overweight rating on Netflix, expressing confidence in the streaming giant's potential to outperform the S&P 500 into 2025.
The firm's analyst raised the price target to $1,000 from the previous $785, citing factors such as a decrease in competitive intensity and the introduction of live events. Analysts predict Netflix's revenue growth will remain resilient, with an EPS forecast of $20.33 for FY2024.
Netflix has also secured exclusive US rights to broadcast the 2027 and 2031 FIFA Women's World Cups. This marks the company's first complete rights acquisition for a major sports event, expected to enhance the profile of women's football and provide comprehensive coverage to fans.
On the financial front, UBS has updated its outlook on Netflix, raising its price target from $825.00 to $1,040.00, while maintaining a Buy rating on the stock. The firm anticipates a 12.3% three-year compound annual growth rate in revenue and a 24% CAGR in operating income through 2027.
However, Loop Capital has downgraded Netflix from Buy to Hold, reflecting the belief that factors previously giving Netflix a competitive edge have now been largely incorporated into the stock value. In contrast, Oppenheimer maintains an Outperform rating on Netflix, citing the potential for higher monetization and subscriber estimates as the company demonstrates its capacity to host live events.
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