Netflix, Inc. (NASDAQ: NFLX) is refocusing on its core streaming and advertising strategy after stepping away from a proposed acquisition of Warner Bros. Discovery (NASDAQ: WBD) assets. The move underscores Netflix's continued emphasis on organic growth. Despite lowering its price forecast, Bank of America Securities remains bullish on the streaming giant.
Netflix Walks Away From Warner Bros. Deal
Analyst Jessica Reif Ehrlich maintained a Buy rating on Netflix while lowering her price forecast from $149 to $125.
According to the analyst, Netflix withdrew from its planned acquisition of Warner Bros. Discovery's studio and streaming assets after Paramount Skydance Corp. (NASDAQ: PSKY) raised its competing bid to $31 per share. The Warner Bros. board determined the revised proposal to be superior.
Netflix chose not to match the higher offer and walked away, noting the Warner Bros. assets were a "nice to have" rather than a "must have" for its portfolio.
Company Refocuses On Organic Growth Strategy
Following the decision, Reif Ehrlich said Netflix has returned to its core strategy centered on organic growth. The company continues to invest in content to increase engagement and expand its advertising business.
The analyst pointed to live events, sports programming, and international markets as key drivers of growth. She also highlighted emerging initiatives in podcasting, mobile content, vertical video, and gaming.
Analyst Sees Long-Term Growth Opportunity
Reif Ehrlich added that Netflix still has meaningful expansion potential. The platform remains less than 50% penetrated across global connected TV households, leaving room for subscriber growth in both mature and emerging markets.
She expects 2026 revenue of $51.3 billion, representing 13% year-over-year growth. Operating margins are projected at 31.5%, alongside earnings per share of $3.19 and free cash flow of $11.3 billion.
The analyst also noted that multiple compressions are visible across peers. However, she said Netflix's global scale, brand strength, and clear growth drivers position it to continue outperforming.