I continue to believe current $Warner Bros. Discovery(WBD.US) deal uncertainty is an overhang on $Netflix(NFLX.US) stock, presenting investors with a potential asymmetrical return opportunity.
Our $Netflix(NFLX.US) price target is $98 (+27% upside) based on 2030 EPS of $5.70 at a 1.75x PEG x 15% long-term growth, discounted at a 11.2% cost of equity (beta 1.2x). We estimate downside at $73 (-5% downside) if NFLX P/E re-rates to a market multiple (21.8x) and we apply a 10% haircut to 2030 earnings if WBD integration issues arise. In the unlikely event the WBD acquisition does not go through (i.e. is blocked by regulators), we believe NFLX price could quickly recover to ~ $100. $Netflix(NFLX.US) stock closed at $103 on 12/4/2025, the day before the WBD deal was announced and 2026 EPS estimates are down -3% since then.
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