Netflix Inc (NASDAQ:NFLX, ETR:NFC) has earned a price target boost from UBS analysts, who see the stock reaching $1,450 from their earlier $1,150 target.
This reflects upside of 19% from the streaming giant's share price at the time of writing of about $1,218.
The analysts maintained their ‘Buy’ rating on the stock, citing rising conviction in Netflix’s ability to drive subscriber growth, monetization, and operating margin expansion amid favorable secular trends.
“We believe secular trends and competitive dynamics remain supportive of Netflix's ability to drive stronger monetization and operating leverage,” the analysts wrote.
They see Netflix positioned to benefit from ongoing industry rationalization, as traditional TV competitors continue to experience accelerating declines in general entertainment viewership and revenue.
UBS highlighted that linear TV viewing among persons aged 2 and up dropped 13% year-over-year in the first quarter of 2025, following a 10% decline in 2024.
As a result, major broadcasters are scaling back content investments, with just 10 new scripted series across the four major networks this year, down sharply from 37 in 2018. In contrast, Netflix plans to launch about 30 new series in 2025, excluding returning franchises.
“This retrenchment will also permeate into streaming where competitors are refocusing on core programming competencies and away from the mass market approach of Netflix,” the analysts wrote.
While general entertainment consumption is declining on linear platforms, it still accounts for about 30% of total TV consumption in the US, down from 48% in early 2021. UBS sees this as indicative of more years of viewership substitution to streaming, particularly in Netflix’s largest and most mature market.
Based on updated estimates, the analysts now expect Netflix’s 2025 revenue to grow 14% and operating income to rise 24%, up from previous forecasts of 13% and 23%, respectively.
They expect operating margins to expand by 250 basis points annually to 29.2%, in line with Netflix’s guidance of 12% to 14% revenue growth and 29% margins.
“We expect Netflix to generate approximately $20 of free cash flow/share this year, increasing to $30 in 2026 and $40 in 2027,” the analysts wrote, attributed to the combination of rising content spend at a slower pace than revenue growth and continued share repurchases.