Netflix has been a big winner in 2024, surging almost 50%, and it seems the streaming giant still has room to run as it approaches its third-quarter earnings release next week. UBS, Morgan Stanley, and Oppenheimer are all forecasting continued growth, fueled by strong subscriber momentum and price hikes on the horizon.
UBS analyst John Hodulik is optimistic about Netflix’s positioning as the industry continues to consolidate. He’s expecting solid subscriber growth despite a slowdown in year-over-year numbers. Hodulik has a buy rating on the stock with a price target of $750, implying a modest upside of around 2% from its current level. He believes the platform’s Q4 will be especially strong, with upcoming hits like Squid Game season 2 and NFL content driving subscriber numbers higher. UBS is predicting 7.1 million net new additions for Q4, compared to 5.8 million in the previous quarter.
Beyond just subscriber growth, Netflix’s free cash flow is expected to surge, with projections of an increase of $2.9 billion between 2024 and 2025. That’s an attractive proposition for investors, especially with Netflix’s ability to continue producing high-engagement content.
Morgan Stanley is even more bullish, raising its price target to $820, implying more than 12% upside. Analyst Benjamin Swinburne sees Netflix as having a “long runway” for revenue growth, forecasting a 13% revenue boost in 2025, driven by a mix of price increases and content success. Similarly, Oppenheimer bumped its target to $775 and expects Netflix to raise the price of its standard plan by 8% to 15% globally, excluding the U.S., U.K., and France.
Most analysts agree Netflix is a dominant force in streaming, with 33 of the 48 analysts covering the stock rating it as a buy. While there’s always risk in an overbought stock, the average Wall Street target of $708.75 still leaves some room for growth, especially as Netflix continues to innovate.
As Netflix gears up to report its third-quarter earnings, investors might find this dip an opportune moment to jump in. With price hikes likely on the horizon and more strong content releases in the pipeline, the stock is well-positioned for a continued upward trajectory.
