Netflix has been a popular defensive play in the current unsteady market. But analysts differ on an appropriate valuation for Netflix stock.
Several Wall Street analysts chimed in with their valuation opinions on Netflix ahead of the internet television network's first-quarter earnings report next Thursday.
Needham analyst Laura Martin on Friday reiterated her buy rating on Netflix stock but lowered her price target to 1,126 from 1,150. She reduced her price targets on 16 digital media stocks, citing the negative economic climate and likely recession. Martin's valuations are based on 10-year discounted cash flow for each company.
On the stock market today, Netflix stock fell 0.3% to close at 918.29. Netflix notched its all-time high of 1,064.50 on Feb. 14 before the Trump tariff market correction.
Meanwhile, Citi analyst Jason Bazinet maintained his neutral rating on Netflix stock with a price target of 1,020.
"While we expect a modest Q1 '25 beat, we don't see material upside at prevailing levels," Bazinet said in a client note Thursday. "Beyond results, investor focus will likely focus on updates to firm's ad-tier and sports content strategy."
Analysts polled by FactSet expect Netflix to earn $5.70 a share on revenue of $10.5 billion. That would translate to year-over-year growth of 8% in earnings and 12% in sales — its slowest pace in seven quarters.
Netflix Stock Is On Three IBD Lists
Wedbush Securities analyst Alicia Reese kept her outperform rating on Netflix stock with a 12-month price target of 1,150.
"While massive subscriber growth was the primary driver in 2024, we expect price increases to drive revenue growth in 2025, and the ad tier to drive revenue higher in 2026," she said in a client note Friday.
BofA Securities analyst Jessica Reif Ehrlich said Netflix and Spotify are her "preferred buys" in the current market environment.
"Both have strong subscription models with critical entertainment, which historically performs well in a recession," she said in a client note Thursday. "Further, both have advertising businesses which are nascent (small percentage of revenue) and should be an incremental positive."
Reif Ehrlich has a price target of 1,175 on Netflix stock.
Netflix stock is on three IBD lists: IBD 50, Leaderboard and Big Cap 20.
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