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Investing.com -- Jefferies reiterated its Buy rating on Netflix (NASDAQ:NFLX) and raised its price target for the stock to $1,400 from $1,200 in a note Tuesday, citing confidence in the streaming giant’s long-term growth trajectory and favorable near-term catalysts. 

The analysts see “a favorable catalyst path with U.S. price hikes and a robust content slate driving potential upside in 2H25.”

Following a record 41 million net subscriber additions in 2024 and an 84% stock gain over the past year, investors have debated how Netflix can sustain its momentum. 

Jefferies believes growth will continue, supported by upcoming hits such as Squid Game, Stranger Things, and Wednesday, as well as limited churn from recent price increases. 

“Churn from recent price increases has been limited, suggesting long-term pricing power is intact,” the firm wrote.

Jefferies expects advertising to be a major revenue engine in the coming years. “The ad business is still in its infancy with the potential for revenue to 5x from $2B in FY25 to $10B+ longer term,” Jefferies said. 

The analysts forecast Netflix can sustain over 20% annual free cash flow growth, reaching $18 billion over five years, up from $6.9 billion currently.

Risks include tough comparisons in 2026, especially in the U.S. and Canada, and potential pressure on margins from live sports investments.

Still, Jefferies raised its FY26 and FY27 EBITDA forecasts by 4% and 5%, respectively, and noted that “long-term valuation analysis supports upside.”

Jefferies’ new $1,400 target implies about 15% upside from current levels and reflects “~36x our FY26 EBITDA.” 

The firm concluded: “We continue to see a favorable catalyst path for NFLX over the short, medium, and long-term.”

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