After giving up on bidding for Warner Bros., Netflix (NFLX.US) received a "buy" rating from Citigroup.

After the bidding war between Netflix (NFLX.US) and Paramount Sky (PSKY.US) for Warner Brothers (WBD.US) assets, Citigroup resumed its rating on the streaming giant Netflix, giving it a "buy" rating and a target price of $115. The firm believes that there are multiple catalysts that could push Netflix's stock price up by 5% to 17%, including the company raising its full-year EBIT guidance, raising prices in the US in the fourth quarter, and larger scale stock buybacks. Citigroup said on Wednesday: "Many investors believed that Netflix was unlikely to raise prices during the regulatory review related to the merger. However, we now believe that Netflix has no reason not to raise prices - but does Netflix have pricing power? We believe they do." Citigroup also believes that Netflix's significant budget for content puts it ahead of competitors, giving the company a competitive advantage in the coming years. The firm stated: "We believe that to challenge Netflix's competitive advantage, competitors must increase their content investments. However, we do not see this happening in the short term, as Walt Disney Company (DIS.US) and Peacock seem focused on profitability, and other competitors have high leverage ratios." However, Citigroup currently sees the only risk facing Netflix as a decline in expected advertising revenue. The market generally expects Netflix's advertising revenue to reach $11 billion by 2030, lower than the $12 billion in April 2025, and this number may further decline to around $9 billion.