Netflix (NFLX) has agreed to buy Warner Bros. from Warner Bros. Discovery (WBD) in a deal worth $82.7 billion. This includes Warner Bros.’ gaming division, and the various studios under its control, such as Batman: Arkham developer Rocksteady, Mortal Kombat developer NetherRealm, Hogwarts Legacy developer Avalanche, and Lego game series developer TT Games.
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While Netflix is largely interested in the IPs that Warner Bros. holds, such as DC Comics’ collection of characters and stories, it will also help beef up the streaming service’s video game offerings. Netflix has recently shifted focus to developing games based on its own IPs, rather than original titles. With Warner Bros.’ wealth of developers under its control, Netflix can continue this strategy. This will allow it to utilize Warner Bros.’ talents for its own IPs, and allow the continued development of games based on Warner Bros.’ properties.
Today’s news bolsters Netflix’s gaming division, which recently lost one of its studios. Spry Fox was sold back to its founders, as its focus on original titles didn’t match well with Netflix’s new game development strategy.
Netflix Stock Movement Today
Netflix stock was down 1.78% on Friday, but remained up 13.78% year-to-date. The stock has also increased 10.43% over the past 12 months. Today’s news marks a major change for Netflix, as the streaming studio has acquired what was once a major entertainment provider. However, the shift to streaming, along with other factors, diminished Warner Bros. business to the point that this acquisition is possible.
Is Netflix Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Netflix is Strong Buy, based on 28 Buy, seven Hold, and a single Sell rating over the past three months. With that comes an average NFLX stock price target of $139.13, representing a potential 37.29% upside for the shares.
