Netflix’s failure to buy Warner Bros. Discovery is creating several potential upside catalysts for its stock, Citi says. The bank resumed coverage on the streaming platform company with a buy rating and a $115 price target, which indicates a more than 20% advance from Tuesday’s close. With no major M & A activity looming over the company, analyst Jason Bazinet said in a Tuesday note that there are three reasons to be a bull on Netflix — which is nearly 30% off its 52-week high. Firstly, Bazinet noted that Netflix’s current full-year 2026 operating income margins guidance accounted for Warner Brothers acquisition costs. Now, he expects the company to revise that guidance higher to around 32% operating income margins from 31.5%. Next, he thinks the company will likely raise prices in October 2026. “Many investors believed Netflix was unlikely to raise prices during the regulatory review associated with M & A,” Bazinet wrote. “Today, however, we see no reason Netflix can’t raise prices – but does Netflix have pricing power? We think they do.” NFLX 6M mountain NFLX six-month chart. Lastly, with a larger cash balance, Bazinet expects Netflix to conduct more share repurchases. That could have up to a 10% benefit on the stock, he said. There is one risk to the stock, though: advertising revenue. He estimates that annual ad revenue growth will be closer to $1.5 billion, while consensus estimates on the Street are around $2 billion. Revisions downwards closer to his estimate could be a headwind for the stock, but not enough to knock off its tailwinds. “We expect Netflix will remain the leader in streaming for the next few years,” he wrote. “While we see some risk of consensus ad revenue estimates falling over the next few years, we don’t expect any near-term pressure.” Netflix shares were falling slightly in morning trading Wednesday.
