“Netflix has won the streaming wars. Case closed,” wrote analyst MoffettNathanson analyst Robert Fishman today in a bullish report including a “buy” rating on the shares (up from neutral) and new price target of $1,100, higher by $250.
“We raise our estimates with greater confidence in the margin expansion story,” Fishman wrote as Netflix stock oupaced its peer and the broader markets rising 4.2% in mid-afternoon trade to about $956.
In a day or recovery, other media and tech stocks on the move include Snap (up 5%), Lionsgate (up 4.2%), TKO Group (up 3.3%), Warner Bros. Discovery, Spotify, AMC Entertainment and Cinemark (up 3%), Disney (up 1.15%) and more.
Broader markets also rallied with the Dow Jones Industrial Average up 390 points and the Nasdaq, S&P 500 and Russell 2000 in positive territory after a brutal month marked by chaos around the Trump administration’s global tariffs.
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With trade wars threatening to increase inflation, Treasury Secretary Scott Bessent fanned worries Sunday when he told NBC’ Meet The Press that “corrections are healthy,” that he isn’t concerned about the market downturn and that he does not guarantee the U.S. won’t face a recession.
The Federal Reserve is meeting this week – March 18 and 19 — a key gathering where markets and investors will get the first inkling of where it stands on interest rates.
More on Netflix: The MoffettNathanson report follows strong fourth quarter earnings and upbeat comments by executives after. “The Netflix flywheel is in full effect. Because Netflix has more subscribers to spread its content spending across, it can afford to spend more on content. Because it has more content, it drives better engagement, leading to more subscribers and possibly better pricing power in a virtuous cycle. This is the enduring power of Netflix’s first-mover advantage in streaming,” the firm wrote.
The question is, “where does the company go from here?
He posed three issues. First, can the streamer’s core business sustain this level of growth? His answer, yes. “When looking at revenue per hour viewed, Netflix still appears to be under-earning relative to the engagement it drives, and we believe it still has a consumer surplus to price into going forward.”
On advertising, as Netflix builds out its ad capabilities, he said, it “will also be able to effectively ramp monetization of this unlocked incremental subscriber ad-tier TAM. We now forecast Netflix will generate over $6 billion in advertising revenue in 2027 and almost $10 billion by 2030.”
And margins. “Continued growth in subscription revenues and faster growth in advertising should drive margin expansion of at least +200 bps per year going forward, reaching 40% by 2030 with room to grow from there.”