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Investing.com - Morgan Stanley has removed Netflix (NASDAQ:NFLX) from its Top Pick list on Monday, while maintaining an Overweight rating and $1,500.00 price target on the streaming giant’s stock. The streaming leader has demonstrated remarkable strength, posting a 68.8% return over the past year and achieving a perfect Piotroski Score of 9, according to InvestingPro data.
The removal comes as Netflix met Morgan Stanley’s automatic drop criteria of being outstanding on the list for six months, according to the investment bank’s research note.
Morgan Stanley continues to view Netflix’s global leadership position and content budget as key advantages in capturing market share within the growing streaming industry.
The firm remains positive on Netflix’s business model, describing it as "FCF generative" with long-term free cash flow margins dependent on the company’s ability to drive higher scale on fixed operating costs.
Morgan Stanley also highlighted that the addressable market for streaming remains compelling, supporting its continued Overweight stance on Netflix shares despite the Top Pick designation removal.
In other recent news, Netflix’s earnings and revenue potential have been a focal point for analysts. Seaport Global Securities upgraded Netflix’s stock rating from Neutral to Buy, citing the company’s potential for increased ad revenue. Meanwhile, Bernstein has reiterated its Outperform rating, analyzing Netflix’s possible interest in acquiring Warner Bros. Discovery. On the other hand, Goldman Sachs has lowered its price target to $1,300, expressing concerns over streaming competition, although it maintains a Neutral rating.
Additionally, Netflix has entered a global partnership with AB InBev, focusing on co-marketing campaigns for various global and regional titles. Evercore ISI continues to uphold its Outperform rating with a $1,375 price target, noting positive trends in the U.S. market despite some weaker churn intent among subscribers. These developments highlight the ongoing strategic moves and analyst evaluations surrounding Netflix.
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