Netflix's (NASDAQ:NFLX) price target was raised by analysts at both KeyBanc and Bank of America on Wednesday, with both maintaining their bullish ratings on the stock.
KeyBanc analysts raised the NFLX price target to $545 from $525 in their 4Q preview note. They said their firm believes "Netflix's recent ad-supported MAU milestone reinforces that: 1) member growth remains healthy and 2) revenue growth should hold in the low-teens over the medium term as Netflix benefits from pricing and ads monetization."
"Net, we raised our 4Q revenue/EPS forecast by 1%/3% and are now 7% above Street 2024E/2025E EPS. We raise our PT to $545 (25.7x 2025E P/E) and maintain our Overweight rating," they concluded.
Meanwhile, BofA titled its note "Crowning the king in streaming," raising the Netflix price target to $585 from $525 per share and reiterating a Buy rating.
"It is becoming increasingly clear that Netflix has won the 'streaming wars,'" said analysts at BofA.
"Over the last 18 months, changing market dynamics, investor focus on profitability, and the various talent strikes have led several media companies to re-evaluate their streaming aspirations," they wrote. "These changes (e.g., reducing content spend/output, increasing third-party licensing) have been a tacit acknowledgement that not all media companies will be able to achieve Netflix's global reach and scale in streaming."
Overall, BofA believes it is a win-win for the industry and Netflix, with the availability to purchase third-party content likely driving additional efficiencies at Netflix "as the company no longer needs to finance as much higher-risk new production and can supplement more concentrated 'bets' with well-known established content." The firm also notes that the recent top 10 list from Netflix has been dominated by third-party content.