Evercore ISI lifts Netflix stock price target to $1,350

On Friday, Evercore ISI analyst Mark Mahaney increased the price target for Netflix (NASDAQ:NFLX) shares to $1,350 from the previous $1,150 while maintaining an Outperform rating. The stock, currently trading near $1,185 and close to its 52-week high of $1,215.91, has delivered an impressive 83% return over the past year according to InvestingPro data. Mahaney’s optimistic stance is based on detailed survey work in the U.S. and UK, as well as a one-year advancement in the firm’s valuation approach.

The analyst highlighted that Netflix operates within a vast total addressable market, with global entertainment revenues excluding China and Russia exceeding $650 billion. Despite this, Netflix’s market share remains below 10%, suggesting significant room for growth. With a market capitalization of over $504 billion and a perfect Piotroski Score of 9 on InvestingPro, the company demonstrates strong financial health. Mahaney praised Netflix’s management team, pointing to their strong track record in innovation across features, content, genres, and user interface.

Netflix’s business model has shown positive trends, with increasing operating margins and free cash flow generation. This financial health could potentially lead to share repurchases and the initiation of dividend payments. The analyst also noted the value proposition of Netflix’s $7.99 ad-supported plan, which could become particularly attractive in the event of a recession.

Mahaney concluded by acknowledging the challenge for investors, given that Netflix’s stock price is trading within 15% of the new price target and at 38 times the projected 2026 earnings per share of $31. Despite this, the firm’s position remains "Consistently Constructive" on the stock.

In other recent news, Netflix has been in the spotlight with several notable developments. TD Cowen raised its price target for Netflix to $1,325, citing significant growth in the number of monthly active users for its ad-supported tier. This comes as Netflix plans to fully implement its in-house advertising technology by June 2025, with expectations of doubling ad revenues year-over-year in 2025. Meanwhile, JPMorgan downgraded Netflix’s stock rating from Overweight to Neutral, though they increased the price target to $1,220. This adjustment reflects a reassessment of the risk/reward balance given Netflix’s current high valuation.

In content-related news, Netflix announced the addition of the beloved children’s show Sesame Street to its programming lineup, with both new and past episodes set to premiere later this year. Loop Capital maintained a Hold rating on Netflix, keeping the price target at $1,000, highlighting Netflix’s expanding dominance over traditional media companies. The firm noted Netflix’s diverse content lineup and upcoming sophisticated ad targeting features. Despite these advancements, Loop Capital did not adjust its financial estimates, citing the company’s current valuation.

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