Netflix stock rating reiterated at Buy by TD Cowen despite Brazil tax impact

Investing.com - TD Cowen has reiterated its Buy rating and $1,425.00 price target on Netflix (NASDAQ:NFLX) following the streaming giant’s recent quarterly results. According to InvestingPro data, Netflix currently trades above its Fair Value, with a market capitalization of $527.5 billion and impressive revenue growth of 14.8% over the last twelve months.

The streaming company reported third-quarter revenue in line with consensus estimates, driven by growth in subscribers, pricing, and advertising revenue. Operating income exceeded consensus by 6% when excluding a retroactive tax charge related to Brazil. With a robust gross profit margin of 48.5% and a perfect Piotroski Score of 9, Netflix demonstrates strong financial health.

Netflix provided fourth-quarter revenue guidance 0.6% above consensus while operating income guidance aligned with expectations, implying a 30.8% margin for 2025 (excluding the tax charge) compared to analysts’ 29.4% estimate. Management now expects advertising revenue to grow more than 100% year-over-year in 2025, an upgrade from its previous projection of approximately 100%. InvestingPro subscribers can access 16 additional key insights about Netflix’s growth prospects and valuation metrics.

TD Cowen maintained its $1,425 price target despite the stock falling 6%, which the firm characterized as "an overreaction." The investment bank made minor adjustments to its fourth-quarter operating income estimates to reflect management’s guidance while keeping revenue projections unchanged.

The firm cited Netflix’s "multi-year lead in building out a truly global streaming platform supported by owned Originals and local language content at scale" as key factors supporting its continued Buy rating, emphasizing that the long-term opportunity remains significant.

In other recent news, Netflix reported third-quarter revenue of $11.5 billion, marking a 17.2% year-over-year growth, which aligned with expectations and indicated a slight acceleration from the previous quarter. This performance led Rosenblatt Securities to raise its price target for Netflix to $1,530, maintaining a Buy rating. Similarly, Canaccord Genuity kept its Buy rating with a price target of $1,525, despite noting a decline in operating income due to a $619 million charge related to a tax dispute in Brazil.

Wedbush adjusted its price target for Netflix to $1,400 from $1,500, citing concerns about slower growth anticipated in the latter half of 2025, but still maintained an Outperform rating. KeyBanc reiterated an Overweight rating with a price target of $1,390, despite Netflix’s recent underperformance compared to broader market indices. Meanwhile, Goldman Sachs maintained its Neutral rating with a $1,300 target, focusing on Netflix’s execution in content, margin expansion, and scaling of its ad-supported subscription tier. These developments reflect various analyst perspectives on Netflix’s future performance and strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.