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On Wednesday, Citi analyst Jason Bazinet reaffirmed a Neutral rating on Netflix (NASDAQ:NFLX) shares, maintaining a price target of $920.00. Bazinet's comments followed Netflix's fourth-quarter 2024 earnings report, which revealed revenues slightly above Wall Street expectations by approximately 1% and operating income that was 2% higher than the consensus.
The streaming giant, now valued at $371.75 billion, has demonstrated remarkable momentum with a 79% return over the past year. Netflix's performance was particularly noted for its significant subscriber growth, with 18.9 million new additions in the quarter, nearly double the ValueAct consensus prediction of 9.6 million.
Netflix's forecast for the first quarter of 2025 was less optimistic, falling below consensus estimates. However, the company adjusted its revenue and operating income margin outlook for the full year of 2025, with the midpoint of these projections surpassing Street estimates.
This revision reflects a positive adjustment based on the company's performance and future expectations. According to InvestingPro analysis, Netflix currently trades at a P/E ratio of 48, with strong financial health metrics and consistent revenue growth of 14.8% year-over-year, though current valuations suggest the stock may be overvalued.
The company also announced price increases for most of its subscription plans in the United States, Canada, Portugal, and Argentina. These changes had been previously incorporated into Netflix's original outlook for 2025, which was shared during the third-quarter 2024 results announcement. For deeper insights into Netflix's valuation and growth prospects, including 16 additional ProTips and comprehensive financial analysis, check out the full research report on InvestingPro.
Bazinet suggested that the combination of a strong subscriber increase and the enhanced outlook for 2025 could lead to a rise in Netflix's share price the following day. The price adjustments across several key markets are part of Netflix's strategy to grow revenue and potentially expand operating margins in the coming years.
In other recent news, Netflix has seen a series of upgrades and revised price targets from multiple financial firms. Barclays (LON:BARC) upgraded Netflix's stock from Underweight to Equalweight with a new price target of $900, citing the company's strong revenue growth and cash flows. JPMorgan revised its price target for Netflix to $1,150, backed by the company's new $15 billion stock buyback authorization and its expected average revenue growth of 14% in 2025 and 2026. TD Cowen also raised its price target to $1,150, maintaining a Buy rating based on a positive outlook for the company's revenue and subscriber growth.
Canaccord Genuity upgraded Netflix from Hold to Buy, setting a new price target of $1,150, following impressive revenue growth and paid memberships. Additionally, Oppenheimer raised its price target for Netflix to $1,150, citing strong margin dynamics due to conservative revenue guidance and modest price increases. KeyBanc increased its price target to $1,100, buoyed by the expectation of low double-digit percentage revenue growth and an annual earnings per share increase of over 20%.
These recent developments highlight Netflix's ongoing momentum in the entertainment industry. The company has announced price increases for most subscription plans in select countries, a move that is included in its fiscal year 2025 guidance. Netflix's content lineup for 2025 and the expansion of its advertising tier were highlighted as key growth drivers.
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