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On Friday, Oppenheimer kept a positive outlook on Netflix (NASDAQ:NFLX) shares, raising the price target to $1,200 from $1,150 while maintaining an Outperform rating. The firm’s analysts cited the successful U.S. pricing increase, which did not result in higher customer churn or changes to subscription plans. The company’s recent price hike in France was also noted as a sign of Netflix’s resilience in uncertain economic times. Trading at $973.03, Netflix has demonstrated remarkable strength with a 59.37% return over the past year. According to InvestingPro analysis, the stock currently appears overvalued, though it maintains a perfect Piotroski Score of 9, indicating excellent financial strength.
In light of the first quarter performance, Oppenheimer pointed out that Netflix exceeded expectations in both advertising and subscription revenue, as well as profit margins. The company’s guidance for the second quarter revenue and earnings before interest and taxes (EBIT) is projected to be 1% and 14% higher than Wall Street estimates, respectively. Furthermore, the unchanged full-year 2025 guidance was highlighted as potentially conservative, suggesting only a moderate slowdown in the second half of the year despite potential foreign exchange reversals. With a robust revenue growth of 15.65% and an impressive gross profit margin of 46.06%, Netflix continues to demonstrate strong financial performance. InvestingPro subscribers have access to 18 additional key insights about Netflix’s financial health and growth potential.
The analysts underscored Netflix’s confidence in meeting its guidance, including growth in advertising revenue, even amid a potentially weaker macroeconomic environment. They believe that consumers tend to value television more during times of economic uncertainty, which could benefit Netflix. Additionally, the launch of Netflix’s first-party advertising platform in the United States this April was mentioned, with expectations for advertising revenue to double by 2025 and become a significant contributor to revenue in 2026.
Finally, Netflix’s financial strategy was also a point of emphasis, with the company having repurchased $3.5 billion of its stock. Oppenheimer’s price target is based on a 30 times multiple of Netflix’s estimated earnings per share (EPS) for 2027, or a 20 times multiple of the 2030 estimated EPS, discounted at 7% for four years. Currently trading at a P/E ratio of 47.84, Netflix commands a market capitalization of $416.22 billion. For comprehensive analysis of Netflix’s valuation and growth prospects, including detailed Fair Value calculations and peer comparisons, explore the full research report available on InvestingPro.
In other recent news, Netflix reported strong first-quarter results for 2025, surpassing earnings expectations with an EPS of $6.61 compared to the forecasted $5.69. The company also achieved revenue of $10.54 billion, slightly above the anticipated $10.5 billion, reinforcing investor confidence. UBS, Pivotal Research, Jefferies, and BMO Capital have all shown optimism towards Netflix, with UBS raising its price target to $1,150 and Pivotal Research increasing it to $1,350, both maintaining a Buy rating. Jefferies and BMO Capital also maintain a Buy rating, with Jefferies setting a price target of $1,200 and BMO Capital increasing its target from $1,175 to $1,200. Analysts attribute this positive outlook to Netflix’s strong financial performance, including a 16% year-over-year revenue growth in the first quarter and a 25% increase in EBITDA, as noted by Pivotal Research. Additionally, Netflix’s management has highlighted significant growth prospects, such as the doubling of advertising revenue projected for 2025, supported by the expansion of its ad-supported tier and enhancements in its ad tech capabilities. These developments reflect Netflix’s strategic efforts to adapt to market changes and capitalize on new revenue streams.
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