Netflix Inc (NASDAQ:NFLX , XETRA:NFC ) is returning to its core strategy after pulling out of the bidding process for Warner Bros Discovery Inc’s (NASDAQ:WBD , XETRA:J5A ) studio and streaming assets, according to Bank of America analysts.
The move follows an increased offer from Paramount Skydance Corp (NASDAQ:PSKY), which Warner Bros.’s board deemed preferable. Netflix called Warner Bros. a “nice to have” rather than a “must have” for its portfolio.
With the deal behind it, Netflix’s strategy is now “returning to business as usual,” emphasizing organic growth, content investment, and expanding the advertising business, the bank’s analysts wrote. They noted that areas such as live events, sports, global content, podcasts, and mobile offerings, including vertical video and gaming, remain key growth drivers.
Netflix is present in less than 50% of closed TV households worldwide, indicating the potential for subscriber expansion in both mature and emerging markets.
“Opportunity determinations still remain significant,” 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, versus the company’s guidance of 12% to 14% growth.
Operating margin is estimated at 31.5%, translating to earnings per share of $3.19 and free cash flow of $11.3 billion.
Analysts reiterated a ‘buy’ rating on Netflix while lowering the price target to $149 from $125, citing multiple compression among comparable peers. Shares traded hands at $98 on Friday morning.
“Backed by its world-class brand, leading global subscriber scale, positioning as an innovator and increased visibility into growth drivers, we believe Netflix will continue to outperform,” they wrote.
