Netflix Inc (NASDAQ:NFLX)

Netflix Inc is set to maintain strong operational momentum into 2025, benefiting from industry shifts and its robust content slate, according to UBS.

UBS has raised its price target on Netflix's stock from $825 to $1040.

The brokerage views Netflix as the primary beneficiary of structural changes in the media landscape, particularly as rivals reduce spending and consolidate. By contrast, Netflix's continued investment in original content—including anticipated new seasons of Stranger Things, Squid Game, and Wednesday—is expected to drive subscriber growth and boost revenue through increased pricing and advertising.

UBS noted, “The wider DTC environment continues to shift in Netflix's favor with peers rationalizing spend and raising price. Industry consolidation would only accelerate these trends and rationalize the market.”

The analysts anticipate that Netflix will add 32 million subscribers in 2024, an increase from 30 million in 2023, followed by an additional 22 million in 2025. Price hikes in select markets and a projected doubling of advertising revenue next year are expected to accelerate growth.

The report emphasized Netflix's capability to grow revenue at a faster rate than its content spending, thereby enhancing free cash flow and operating leverage.