Netflix (NFLX) stock gained a fresh boost of confidence after top-rated Citi analyst Jason Bazinet raised the price target from $1,020 to $1,250 while maintaining his Hold rating. Overall, the firm has reversed its earlier downward revisions to advertising forecasts in the media sector that were made due to tariff concerns. Nonetheless, However, Bazinet still views Netflix stock as overvalued, citing excessive investor enthusiasm that has pushed prices beyond what fundamentals justify..
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Citi Upbeat on Media Ad Revenues
Citi had previously reduced its advertising revenue estimates due to concerns about tariffs. However, it has reversed that decision as the tariff risks have eased and it’s more optimistic about ad revenues. Earlier this month, Citi stated that the proposed tariff could slash Netflix’s earnings per share by as much as 20%, in a worst-case scenario.
Additionally, Bazinet expects companies in the media sector to engage in major mergers and acquisitions in the coming years, which could reshape the industry dynamics.
Citi Cautions on Lofty Valuation
Despite maintaining an overall bullish outlook on the media sector, Citi flagged valuation concerns for both Netflix (NFLX) and Spotify (SPOT), stating that their current stock prices appear unattractive at prevailing levels.
While the firm acknowledged that both companies boast strong fundamentals, including solid revenue, user growth, and profitability, it cautioned that the recent surge in valuation multiples, such as price-to-earnings and EV/EBITDA, seems overly optimistic. According to Citi, this multiple expansion is “a bit too robust” and not fully supported by the companies’ underlying performance, limiting further upside potential.
What Is Netflix Stock Prediction?
Turning to Wall Street, NFLX stock carries a Strong Buy consensus rating. Among the 38 analysts covering the stock, 29 have issued Buy recommendations, and nine rate it as Hold. Moreover, the average Netflix stock price target of $1,195.34 implies a 0.88% upside potential from current levels.
Year-to-date, NFLX stock gained 33%.
