KeyBanc: Netflix (NFLX.US) is expected to outperform the market next year, raising its target price to $1000.

KeyBanc analysts led by Justin Patterson raised Netflix's target stock price from $785 to $1000, maintaining a "overweight" rating. The company cited several reasons for this, believing that Netflix's performance before 2025 could outperform the S&P 500 index, including easing competition intensity, increasing live events, revenue and earnings growth better than peers, and a higher minimum valuation. It is worth noting that Netflix is not just producing movies and TV shows anymore. It has changed its previous strategy of being "uninterested in live sports" and is making efforts to not miss out on this big opportunity. In January 2024, Netflix announced a huge deal with WWE worth $5 billion over 10 years, starting in 2025, to broadcast the flagship brand Raw of wrestling promotion on Netflix, marking the company's first long-term commitment to live sports programming. In May of this year, the company announced a three-year deal with the National Football League (NFL) to broadcast two Christmas games, marking the company's first broadcast of mainstream American sports events. Netflix will pay the NFL $150 million. But this big sum of money could be a good deal for Netflix - it is estimated that Netflix could make $100 million per game just from advertisements alone. KeyBanc also believes that Netflix could raise prices as strong content like the NFL and Squid Games 2 can create profit opportunities. The potential for collaboration with the Ultimate Fighting Championship (UFC) also adds to its attractiveness. Although UFC had previously expressed a desire to stay on ESPN, KeyBanc analysts believe that Netflix's success in the Tyson vs. Paul fight and initial viewership of WWE (a business division of UFC owner TKO) could make Netflix a strong competitor. Meanwhile, there is still room for price increases in the future. The last time Netflix significantly raised prices was in January 2022. The institution wrote: "Based on U.S. pricing points, Netflix's hourly cost is still about half of cable TV, much lower than movie tickets. With more live events coming, we believe the likelihood of price increases is increasing." Netflix's performance this year has exceeded that of competitors. Netflix had a strong performance this year. The company's earnings and revenue in the third quarter exceeded Wall Street's expectations. In the latest third quarter earnings report, Netflix earned $5.40 per share, surpassing analyst estimates of $5.12. Revenue grew 15% to $9.83 billion, surpassing the company's guidance and market expectations. Netflix expects revenue to grow 15% in the fourth quarter of 2024 and for the full year. By 2025, Netflix expects revenue to reach $43-44 billion, an increase of 11%-13% from the expected $38.9 billion in 2024. This is primarily due to an increase in paid members and average revenue per member. StreetAccount data shows that in October of this year, Netflix reported an increase of 5 million users in the third quarter, surpassing Wall Street's estimate of 4.5 million. As of the third quarter, Netflix had a total of 282.7 million members. Netflix's stock price has risen 90% this year. In the same period, its competitor Walt Disney Company (DIS.US) only rose 25%, while Warner Bros. Discovery (WBD.US) fell by 7%.