Netflix: Buy Rating Reaffirmed on Strong Fundamentals and Ad-Driven Growth Despite Warner Bros. Discovery Deal Uncertainty

Analyst Brian Pitz from BMO Capital reiterated a Buy rating on Netflix and keeping the price target at $143.00.

Brian Pitz has given his Buy rating due to a combination of factors that, in his view, outweigh near-term headline risks. He acknowledges that investor sentiment has been hurt by worries over slower growth in 2026 and uncertainty around Netflix’s proposed acquisition of Warner Bros. Discovery, especially with a competing bidder potentially forcing up the purchase price. Even so, he highlights that Netflix would receive a sizable break-up fee if the deal falls through, which would meaningfully offset its content spending, and he questions how far Netflix actually needs to raise its offer. He also points out that the company continues to benefit from a structural shift in ad budgets away from linear TV toward connected TV, where Netflix is still early in monetizing its large audience.

Pitz notes that underlying operating trends remain healthy, with his model unchanged and projecting roughly mid‑teens revenue growth into 2025, easing only modestly in 2026. He emphasizes robust engagement in the most recent quarter, driven by a powerful mix of flagship series, premium live sports, and tentpole events, such as the record-breaking NFL Christmas Day game, which showcased Netflix’s ability to deliver massive audiences. At the same time, he sees room for operating margin expansion over the next several years despite Netflix’s sizable planned content investments, supported in part by efficiency gains, including from AI. Taken together, he concludes that Netflix remains one of the best-positioned platforms in streaming and advertising, justifying his Outperform (Buy) rating and $143 target price.

In another report released yesterday, Bernstein also maintained a Buy rating on the stock with a $125.00 price target.