Netflix gets HSBC Buy rating as analyst highlights 'sturdy' earnings outlook

Investing.com -- HSBC has initiated coverage of Netflix with a Buy rating and a $107 target price, arguing that the recent pullback in the shares presents an opportunity for investors.

The bank said Netflix trades “33% below its summer 2025 peak” despite a strengthening earnings profile and a long runway for international growth.

HSBC analyst Mohammed Khallouf told clients in a note that they value Netflix using a relative approach, applying a 34x multiple to 2026 estimated earnings, which implies “18% upside.”

He cited deepening monetisation, improving profitability and a “sizable international opportunity” as key pillars of its bullish stance.

The bank directly addressed Netflix’s $83 billion bid for Warner Bros. Discovery, announced in December.

HSBC believes the deal reflects mounting pressures in a maturing streaming industry, noting that Netflix’s domestic market is nearly saturated and that competition from user-generated video is intensifying.

“NFLX hours viewed only +1% y-o-y in 1H25,” analysts wrote, adding that the rise of YouTube and declining ratings for top originals have contributed to a “more challenging” environment.

Still, HSBC views the proposed tie-up as strategically compelling, arguing that a Netflix-WBD combination “would be a winner.”

The analysts estimate that the merged group could lift 2028–29 earnings by 2% to 4%, with potential additional upside from bundling HBO content and expanding premium offerings. Overall, HSBC believes the Netflix "fundamental earnings outlook remains sturdy."

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