Stock market today: Dow in fresh record close as Powell signals rate cut incoming
On Thursday, BMO Capital Markets affirmed their Outperform rating on Netflix (NASDAQ:NFLX) stock, with a steady price target of $1,200.00. The streaming giant, currently trading at $1,168.01 and commanding a market capitalization of $497 billion, has seen its stock surge nearly 88% over the past year. According to InvestingPro data, 28 analysts have recently revised their earnings estimates upward for the upcoming period, reflecting growing confidence in the company’s trajectory. The endorsement follows Netflix’s disclosure of reaching 94 million Monthly Active Users (MAUs) for its advertising-supported video on demand (AVOD) tier, marking a 34% increase since November. This growth was highlighted during the company’s annual Upfront event. The company’s strong performance is reflected in its impressive 15% revenue growth and perfect Piotroski Score of 9, as reported by InvestingPro, which offers comprehensive analysis through its Pro Research Report, available for over 1,400 top US stocks.
BMO Capital’s analysis points to a beneficial environment for revenue generation in the second half of 2025 and beyond, due to the robust user engagement with the platform. On average, AVOD subscribers are spending 41 hours per month consuming content. The firm anticipates further positive developments as Netflix is set to launch its Ad Suite in the EMEA region next week, which is expected to provide additional momentum for advertising monetization.
Looking ahead, Netflix is preparing to introduce AI-powered advertising formats in 2026, which BMO Capital suggests could offer a sustained boost to advertising revenue over multiple years. The firm’s reiterated Outperform rating and price target reflect confidence in Netflix’s strategic direction and potential for continued growth in the advertising domain.
The analyst’s statement emphasized the significance of the upcoming ad innovations and the expected positive impact on Netflix’s financial performance. "Netflix announced 94M MAUs for its AVOD tier (+34% from November) at the annual Upfront event, which creates a positive monetization setup in 2H25E and beyond. Further, AVOD users spend 41 hours/month watching content, and with the rollout of its Ad Suite in EMEA next week, ad monetization tailwinds remain. AI-powered incremental ad formats will launch in 2026E, creating a multi-year tailwind for ad revenue growth. Reiterate Outperform and $1,200 target price," the analyst from BMO Capital Markets stated.
This development comes as Netflix continues to diversify its revenue streams and enhance its advertising capabilities, positioning the company to capitalize on the growing digital advertising market. With an EBITDA of $11.45 billion and a P/E ratio of 54.06, Netflix maintains strong financial health metrics according to InvestingPro, though current valuations suggest the stock may be trading above its Fair Value. Investors seeking deeper insights into Netflix’s valuation and growth prospects can access detailed financial metrics and 21 additional ProTips through InvestingPro’s comprehensive analysis tools.
In other recent news, Netflix has been the focus of several analyst reports and strategic updates. Evercore ISI maintained its Outperform rating on Netflix, keeping a price target of $1,150. This endorsement followed Netflix’s annual Upfront presentation, which highlighted advancements in its advertising technology and content strategy. Similarly, JPMorgan reiterated its Overweight rating with the same price target, emphasizing Netflix’s strong performance and projecting significant growth in advertising revenue by 2025. BMO Capital Markets also maintained an Outperform rating with a $1,200 target, noting Netflix’s rollout of an enhanced TV experience and AI-powered features aimed at reducing subscriber churn and boosting engagement.
Netflix announced plans to revamp its TV app interface and introduce generative AI to its iOS platform, enhancing search capabilities with natural language processing. This move is part of Netflix’s strategy to maintain market share amid economic uncertainties. Meanwhile, Citi maintained a Neutral rating with a $1,020 target, addressing potential impacts of proposed tariffs on international content. Citi analysts noted that such tariffs could reduce Netflix’s earnings per share by approximately 20%, though the company is expected to employ strategies to mitigate these risks. These recent developments reflect Netflix’s ongoing efforts to innovate and adapt in a competitive streaming market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.