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On Monday, TD Cowen maintained a positive outlook on Netflix (NASDAQ:NFLX) shares, raising the price target to $1,325 from the previous $1,150 while reiterating a Buy rating. The stock, currently trading at $1,190.58 and near its 52-week high, has delivered an impressive 92% return over the past year. The research firm’s analyst cited significant growth in the number of monthly active users (MAUs) for Netflix’s advertising-supported tier, which has seen a sharp increase from 70 million in November 2024 to 94 million as of the recent May 2025 Advertiser Upfront presentation. According to InvestingPro, 29 analysts have recently revised their earnings estimates upward for the upcoming period.
Netflix’s in-house advertising technology is expected to be fully implemented across all markets by June 2025. This advancement is anticipated to enhance data analytics, measurement accuracy, and creative advertising formats. The company’s strong financial position, evidenced by its perfect Piotroski Score of 9 on InvestingPro, supports these ambitious expansion plans. In response to these developments, TD Cowen has increased its forecast for ad tier members to approximately 59 million for the year 2025, up from the earlier estimate of 55 million.
During the Upfront presentation, insights were shared by Netflix’s Co-CEOs Ted Sarandos and Greg Peters, CFO Spence Neumann, and President of Advertising Amy Reinhard. Key takeaways from the discussions included expectations of ad revenues doubling year-over-year in 2025, in line with previous management projections. The company’s current revenue growth of 15% and market capitalization of $503 billion reflect its strong market position. Additionally, the ad fill rate, which reflects the percentage of available advertising space that is sold, is projected to climb significantly in the coming years. This growth is anticipated to be driven by enhanced targeting and measurement capabilities, as well as the introduction of new advertising formats.
Netflix plans to introduce interactive ad formats in the second half of 2025, including features such as calls to action. The streaming giant is also aiming to roll out shoppable ads by the end of the year, which could further bolster its advertising revenue streams. These innovations are part of Netflix’s broader strategy to capitalize on the growing demand for ad-supported viewing options among consumers. While the stock is currently trading above its InvestingPro Fair Value estimate, the company’s "GREAT" financial health score and strong growth metrics suggest continued momentum. For deeper insights into Netflix’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Netflix has announced that the children’s show Sesame Street will join its programming lineup, offering both new episodes and past seasons on the streaming platform later this year. This move comes as Sesame Street maintains its long-standing relationship with PBS, continuing to release new episodes on PBS Stations and PBSKIDS in the U.S. Meanwhile, JPMorgan analysts have downgraded Netflix stock from Overweight to Neutral, despite raising the price target to $1,220, reflecting a cautious stance on the stock’s near-term prospects. The downgrade follows a significant appreciation in Netflix’s stock price, leading analysts to reassess the risk/reward balance.
Loop Capital has maintained a Hold rating on Netflix, keeping a $1,000 price target, highlighting the company’s content strategy and user engagement. BMO Capital Markets affirmed their Outperform rating with a $1,200 target, noting Netflix’s growth in its advertising-supported tier and the upcoming launch of AI-powered ad formats in 2026. Evercore ISI also maintained an Outperform rating, with a $1,150 price target, expressing optimism about Netflix’s advertising technology advancements and content lineup. These developments underscore Netflix’s strategic direction in expanding its content offerings and enhancing its advertising capabilities.
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