Netflix Soars as UBS Sees Cash Flow Surge
Netflix (NASDAQ:NFLX) surged 1.34% to a record?high $1,234 today after UBS raised its price target from $1,150 to $1,450 and reiterated a Buy rating.
UBS analyst John Hodulik cites accelerating viewer engagementQ2 viewing hours for Netflix's top 10 titles are up 10% year?over?year, versus 5% growth last quarteras evidence that Netflix is drawing viewers away from traditional TV. This increased consumption underpins improved monetization from both new and existing subscribers while enhancing operational leverage.
Financial discipline also shines through: Netflix is growing content spending more slowly than revenue, and its share buyback program is ramping up. As a result, UBS forecasts free cash flow of roughly $20 per share in 2025, rising to $30 in 2026 and $40 in 2027figures that underscore robust cash generation potential.
Investors should care because Netflix's ability to control costs while boosting engagement and cash flow suggests the stock could continue its run, especially as legacy TV networks struggle to retain audiences.
This article first appeared on GuruFocus.
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