As Netflix (NASDAQ: NFLX) stock stumbles in the short term in reaction to the Warner Bros. acquisition, Wall Street is largely confident the stock is likely to rally over the next 12 months.
At the close of Friday’s session, NFLX shares were valued at $100, down nearly 3% on the day. Year-to-date, Netflix shares have rallied over 12%.
Indeed, the downturn emerged as investors reacted to two major developments colliding, a rare earnings stumble and the announcement of a $72 billion acquisition of Warner Bros. Discovery’s studios and streaming business, a deal valued at $82.7 billion including debt.
The Warner Bros. deal, one of the largest in entertainment, will give Netflix control of HBO, DC Studios, and Warner’s film and TV catalog. The acquisition hinges on Warner Bros. Discovery spinning off its linear TV networks into Discovery Global, expected by Q3 2026, followed by regulatory approvals, making the timeline long and uncertain.
The deal’s scale and delay have heightened Netflix stock volatility. Q3 2025 earnings added to the swings: revenue hit $11.51 billion, but EPS fell to $5.87, below forecasts, due to a $619 million one-time tax charge from a Brazilian dispute, ending Netflix’s streak of consecutive earnings beats and pushing shares lower.
Wall Street’s take on Netflix stock
Regarding the stock’s outlook, Wall Street analysts at TipRanks have assigned Netflix a ‘Moderate Buy’ consensus, with 28 of 37 analysts recommending a buy, seven holding, and two rating the stock as a sell.
These 37 analysts have issued 12-month price targets for Netflix averaging $137.65, a potential upside of 37.3%. Price forecasts range from a low of $92 to a high of $160, signaling both caution and optimism in the market.
Oppenheimer analyst Jason Helfstein on December 5 reiterated an ‘Outperform’ rating on Netflix with a price target of $145, highlighting the strategic value of its $83B acquisition of Warner Bros. Helfstein noted the deal is expected to be EPS-accretive by FY28, represents roughly 4.5 years of forward free cash flow, and carries minimal antitrust risk due to a combined U.S. viewing share below 10%. He emphasized that synergies and a $5.8B breakup fee further support the transaction, maintaining a bullish outlook on Netflix shares.
Analysts at William Blair reacted positively in a research note released the same day. They described the move as one that cements Netflix’s position as the premier streaming service for original content. The acquisition gives Netflix control over iconic IP such as DC Comics, Harry Potter, and Hanna-Barbera, along with Warner’s production capabilities and theatrical distribution, areas where Netflix has historically been lighter. The analysts highlighted synergies in content integration, talent attraction, and long-term growth, while noting Netflix’s commitment to maintaining Warner’s theatrical releases to honor existing contracts. For context, this builds on William Blair’s longstanding “Outperform” rating on Netflix.
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