“We Think They Do.” Netflix Stock (NASDAQ:NFLX) Notches Up on Several Growth Vectors

Streaming giant Netflix NFLX +0.41% ▲ may have started something great when it passed on the deal to buy Warner Bros. Discovery WBD -1.01% ▼ . In fact, Citi analysts have come out with several reasons that Netflix stock may be in for substantial gains. The news was good enough for investors, as they gave Netflix stock a fractional boost in the closing minutes of Wednesday’s trading.

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Citi, via analyst Jason Bazinet—who has a five-star rating on TipRanks—resumed coverage on Netflix with a Buy recommendation and a price target of $115 per share. That is actually up 20% from the close on Tuesday, so what prompted expectations of that big a surge? It turns out there are several reasons, according to Bazinet.

The biggest reason is that operating income projections already accounted for Warner acquisition costs. Since Warner is now no longer on the table to be acquired by Netflix, Netflix will have to revise its income projections up by a wide margin. A second reason is that another price hike is likely to come starting in October 2026. Netflix was likely delaying this action so as not to run afoul of regulators during the Warner acquisition process. Now, there is no reason to hold back. Bazinet noted, “…does Netflix have pricing power? We think they do.” Finally, a larger cash balance might mean more share repurchases, which is likely to drive up prices as well.

Calling on the Theater

Call it an olive branch if you will, but Netflix is reaching out to theaters to build promotion for the upcoming Stranger Things animated spin-off. Stranger Things: Tales From ’85 will get some limited theatrical screenings, reports note, as certain AMC AMC -5.09% ▼ theaters will get to run the first two episodes on April 18, ahead of the full release on April 23.

Only 34 theaters throughout the United States will get in on this action, though. It is easy to wonder here if Netflix is making this move to promote the series, or to potentially get it into qualification position for an eventual Oscar run. Regardless, those who want to check out the first of at least two major Stranger Things spin-offs can do so in about a month.

Is Netflix Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Strong Buy consensus rating on NFLX stock based on 30 Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 1.66% loss in its share price over the past year, the average NFLX price target of $114.35 per share implies 20.72% upside potential.

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