One week after her analyst peer Jason Bazinet at Citigroup downgraded Netflix, predicting the streaming company will face much higher overall production costs in a post-Hollywood-strike world, Bank of America's Jessica Reif Ehrlich came to a much more bullish conclusion.
Declaring that Netflix has "won the streaming wars," she reiterated her "buy" rating for Netflix, while upping her price target from $525 a share to $585.
"Over the last 18 months, changing market dynamics, investor focus on profitability, and the various talent strikes have led several media companies to re-evaluate their streaming aspirations," Ehrlich wrote in a note Wednesday to investors. "Those companies have reduced their content spending and increased their licensing of content to Netflix and others.
"These changes have been a tacit acknowledgement that not all media companies will be able to achieve Netflix's global reach and scale in streaming," she added.
Ehrlich later appeared on CNBC's Squawk Box to further elaborate on her bullishness, stating, "Netlike is what the old bundle was, all in one service, something for everybody, cuts across every demographic."
Not only is Netflix now in a position to spend more judiciously on content, needing fewer home runs to maintain its engagement, it has outside third-party suppliers once again furnishing it with movies and shows, she said.
Netflix is set to report fourth-quarter/full 2024 earnings next Tuesday, Jan. 23.
