Citi raised its price target on Netflix, Inc. (NASDAQ:NFLX) to $1,250 from $1,020, on May 30, reflecting improved confidence in the company’s advertising outlook. Despite the higher target, the firm maintained a Neutral rating, citing valuation concerns amid elevated investor expectations. The adjustment comes as Citi reverses earlier cuts to its ad revenue projections, which were previously lowered due to tariff-related uncertainties. Analysts now see fewer external risks to Netflix’s advertising business, particularly as its ad-supported tier gains traction.
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In a note to clients, Citi also pointed to the likelihood of major acquisitions across the media landscape in the coming years. The firm suggests these moves could reshape competitive dynamics and influence strategic decisions for companies like Netflix.
Still, despite recognizing the company’s strong fundamentals, Citi remains cautious. The firm describes both Netflix, Inc. and Spotify as “consensus longs” in the sector—popular investor picks that may now be priced for perfection. According to the report, recent multiple expansion for both stocks has outpaced underlying earnings growth, raising questions about future upside.
While Citi acknowledges Netflix’s leadership in streaming and long-term potential in advertising, it believes current market enthusiasm may be overstated. The raised price target reflects improved short-term assumptions, but the Neutral stance signals a belief that gains from here could be limited without a reset in valuation or a new growth catalyst.
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