Benchmark analysts increased their price target for Netflix (NASDAQ:NFLX) from $350.00 to $425.00, while maintaining a Sell rating on the stock.

The analysts noted that the revised price target is primarily influenced by aligning Netflix’s valuation more closely with the Nasdaq 100 rather than the S&P 500, a decision they described as “generously conceding” to market-linked valuations.

Despite this adjustment, the analysts still view Netflix’s long-term business dynamics as more comparable to other large media companies due to the cannibalization of linear viewing by streaming, especially as advertising becomes more prominent. This perspective, they acknowledge, contrasts with the current market consensus.

Reflecting on past analyses, the analysts mentioned that their sell call on Netflix in 2023 was not particularly successful, though they did have a sell rating during its near $700 peak in 2021 and upgraded the stock from sell to buy when it was below $250 in 2018. Emphasizing that they are not persistently bearish, the analysts pointed out that the $425 price target anticipates Netflix reaching nearly 430 million global members by 2033 with a 32% operating margin.

The analysts assert that Netflix’s relevant growth market is now the overall TV spending market, as viewership increasingly shifts from linear to streaming. They believe that Netflix is already effectively monetizing its approximate 8% share of U.S. TV screen time, particularly as it does not feature live sports.

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