So here's a fun thing about corporate strategy: sometimes the best move is the one you don't make. That's the vibe coming from Netflix Inc. (NFLX) after it chose not to raise its bid for Warner Bros. Discovery (WBD). And at least one major Wall Street analyst is giving the streamer a standing ovation for walking away.
JPMorgan analyst Doug Anmuth has upgraded Netflix stock from Neutral to Overweight, slapping a $120 price target on it. This is a bit of a homecoming for the analyst, who had previously withdrawn his rating while JPMorgan was part of the financing team for the proposed merger. Back in May, the bank had downgraded Netflix from Overweight to Neutral with a $124 target. Now, with the deal off the table, Anmuth is declaring things "back to business" for Netflix.
Think about it this way: instead of spending a mountain of cash on a complicated merger, Netflix gets to keep its powder dry and focus on what it does best. Anmuth seems to think that's a pretty good plan.
"We believe NFLX remains a healthy organic growth story, driven by a combination of strong content, global subscriber growth, continued pricing power and an early-stage/under-monetized ad tier," Anmuth said in a new investor note.
In plain English? Netflix can grow just fine on its own, thank you very much. The analyst sees the company maintaining strong operating margins and free cash flow going forward. That financial strength isn't just for show—it could help Netflix start buying back its own shares again now that it's not saving up for a mega-acquisition.
And then there's the AI angle. Everyone's talking about artificial intelligence, but Anmuth has a specific take for Netflix. He thinks AI could be a helper, not a disruptor, for the streaming giant. It could improve how you find the next show to binge, make ads more relevant, and even help produce content more efficiently.
"We believe storytelling and talent will remain critical moats, ultimately better insulating NFLX from AI disruption risk compared to transactional business models," the analyst said.
That's a key insight. In a world where AI can generate content, what's still uniquely valuable? Human creativity and the brand trust Netflix has built. Anmuth is betting that moat is pretty deep.
Looking ahead, the analyst is optimistic about Netflix's content pipeline. He points to a strong slate for 2026 that could re-accelerate engagement. The numbers back up some momentum: viewing hours were up 1% year-over-year in the first half of 2025 and 2% in the second half. For Netflix originals, viewing hours jumped 9% in the back half of the year.
And here's something that might hit your wallet: Anmuth also said Netflix could raise prices in the U.S. in the middle or second half of 2026. Pricing power is a sign of a strong business, and it seems Netflix still has it.
The analyst also sees bigger things for Netflix's Live content, predicting greater scale and even the potential to acquire additional National Football League game rights. Because nothing says "must-watch TV" like live sports.
Wrapping it all up, Anmuth makes the case for why Netflix deserves a premium valuation: "We believe NFLX's scale and streaming leadership position, three-year growth of double digits for revenue and 20%+ for operating income/GAAP EPS/FCF, and a well-insulated subscription-based model all support a premium valuation."
So, what's the market saying? Netflix stock was up 0.67% to $96.88 on Monday. The shares trade in a 52-week range of $75.01 to $134.12 and are up 3.34% year-to-date in 2026. Not a bad day for a company that just said "no thanks" to a blockbuster deal.
