Angela Palumbo

Netflix can continue to see growth, despite skepticism, two Wall Street analysts said on Friday.

Wells Fargo analyst Steven Cahall raised his price target on Netflix stock to $1,500 from $1,222 on Friday, which implies a 23% increase to the stock's last closing price. Cahall wrote in a research note that there's "so much," opportunity for Netflix ahead, specifically when it comes to shorter-form content, and deals with social-media creators.

"We've already seen streamers buy shows from YouTube creators like Mr. Beast and Ms. Rachel, and these brands come w/ big audiences that likely skew more to ad-supported," Cahall wrote. Mr. Beast and Ms. Rachel are two social-media creators with millions of YouTube subscribers, with content geared for younger audiences.

"We think exclusive, multiyear creator deals could be a source of positive NFLX newsflow as they'd support upward revisions. Along w/ sports, it creates a growth path that broadens NFLX engagement in addition to deepening its content," the analyst added. He rates Netflix stock at Overweight.

Pivotal Research Group analyst Jeffrey Wlodarczak also increased his price target on Netflix stock on Friday -- to $1,600 from $1,350 -- and has a Buy rating.

"Netflix remains underpenetrated globally, offers an extremely compelling price to entertainment value (that is continually improving) boosted by their ad supported offering that should allow the company to continue to generate solid subscriber growth and ARPU [average revenue per user] growth," Wlodarczak wrote.

Shares of the streaming platform have already soared 39% this year and 82% over the last 12 months. Investors have been pleased with the continuous subscription and revenue growth Netflix has reported over the last several quarters. On top of that growth, Wall Street looks at Netflix as a stock that is mostly insulated from global economic uncertainty.

Netflix launched its lower-priced ad-supported tier in 2022, and cracked down on password sharing between users in 2023. These two decisions, plus the introduction of live events like comedy roasts and NFL games, has put the company in a strong position.

Netflix reported better-than-expected first-quarter earnings on April 17, and reiterated its 2025 revenue guidance, despite some investor concerns that users might cancel their subscriptions as the ongoing economic environment remains uncertain. On top of these strong results, research firm Nielsen reported on June 17 that streaming services edged out traditional TV in total usage for the first time ever in May.

With the strong performance, Netflix stock isn't cheap. Shares are trading at 43.5 times earnings expected over the next 12 months, which is higher than its five-year average of 37.3 times. The S&P 500 is currently trading at 21.5 times forward earnings.

Some on Wall Street are worried that Netflix's strong growth can't last forever. J.P. Morgan analyst Doug Anmuth downgraded shares to Neutral from Overweight on May 19 while raising his price target to $1,220 from $1,150. He wrote in a research note at the time that while he still has confidence in the company over the long term, "more near-term, following significant stock price appreciation & outperformance, we believe the risk/reward in NFLX shares is becoming more balanced."

Shares of Netflix were rising 1% to $1,234.99 on Friday.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 20, 2025 11:36 ET (15:36 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.