Netflix Inc (NASDAQ:NFLX, XETRA:NFC) is returning to its core strategy after stepping away from the bidding process for Warner Bros Discovery Inc (NASDAQ:WBD, XETRA:J5A) Studio and Streaming assets, according to analysts at Bank of America.
The move follows an escalated offer from Paramount Skydance Corp (NASDAQ:PSKY), which the Warner Bros. board deemed superior. Netflix cited Warner Bros. as a “nice to have” rather than a “must have” for its portfolio.
The bank’s analysts wrote that with the deal behind it, Netflix’s strategy now “reverts back to ‘business as usual,’” emphasizing organic growth, content investment, and expansion of its advertising business. They noted that areas such as live events, sports, international content, podcasts, and mobile offerings, including vertical video and games, remain key growth drivers.
Netflix remains less than 50% penetrated across connected TV households worldwide, highlighting potential for subscriber expansion in both mature and emerging markets.
“The opportunity set still remains sizable,” the analysts wrote, with 2026 growth expected to be driven by a combination of new members, pricing, and advertising.
Bank of America updated its 2026 revenue forecast for Netflix to $51.3 billion, up 13% year-over-year, in line with company guidance of 12% to 14% growth.
Operating margins are projected at 31.5%, translating to earnings per share of $3.19 and free cash flow of $11.3 billion.
The analysts reiterated a ‘Buy’ rating on Netflix while lowering the price objective to $125 from $149, citing multiple compression in comparable peers. Shares traded hands at $98 on Friday morning.
“Supported by its world-class brand, leading global subscriber scale, position as an innovator and increased visibility in growth drivers, we believe that Netflix will continue to outperform,” they wrote.