Netflix Inc (NASDAQ:NFLX, ETR:NFC) has earned a price target boost from Oppenheimer analysts who are bullish on the streaming platform’s live events.
Analysts raised their price target on ‘Outperform’-rated Netflix to $1,065 from $825.
Netflix shares traded hands at $921 on Monday morning, near its all-time high and marking a 96.6% gain in 2024.
Oppenheimer projects live events could unlock an additional 500 million plus global households for Netflix.
“Near-term we expect positive commentary from NFL Christmas Day games similar to Paul/Tyson driving sentiment into Q4 earnings,” they wrote.
The NFL and the Olympics were proven subscriber catalysts for Peacock and Paramount+ but resulted in a 30% to 35% two-month cancellation rate. Analysts believe Netflix’s original content and library should drive stronger retention.
They highlighted that Netflix's "Paul vs. Tyson" event on November 15, 2024, during which internet personality Logan Paul boxed Mike Tyson was the largest live event excluding Super Bowls since the Nixon resignation, bringing in 108 million viewers.
“Separately, Netflix generating $75 million in ad revenue for Christmas NFL games equal licensing fee, therefore getting free acquisition tool,” they wrote.
Live events are also expected to drive stronger ad-tier growth. “Long term, we see a $2.2 billion advertising opportunity for live events,” analysts forecast.
Oppenheimer also sees Netflix’s competition continuing to struggle.
Hollywood’s launch of competing streaming services has caused higher churn which impacts profitability and in turn, limits their ability to produce more content, they wrote.
“Industry churn increased from 4% to 6% versus Netflix’s 2%, creating a structural economic advantage/moat for Netflix via bigger/better library,” analysts wrote. “Even if Hollywood can consolidate under Trump, this would just mean less competition for content creators and better Netflix margins.”
They concluded: “We believe Netflix’s dominance will continue, given its clear advantage in producing high-engagement content and monetizing that content more effectively than peers.”