Deutsche Bank Bullish on Netflix, Sees Growth Upside

Key Moments

Deutsche Bank Shifts to Bullish Stance on Netflix

Investing.com — Deutsche Bank raised its rating on Netflix to Buy from Hold in a note Tuesday, contending that the recent compression in the stock’s valuation leaves ample room for further gains given its growth trajectory.

While Deutsche Bank trimmed its price target on the shares to $95 from $100 after reducing its operating income and free cash flow forecasts, the new target still implies a 37% increase from current levels.

Valuation Compression and Earnings Outlook

Analyst Bryan Kraft highlighted that Netflix is now valued at 18 times Deutsche Bank’s 2027 earnings estimate. This compares with about 40 times forward earnings in June 2025, when the stock reached its peak.

Kraft wrote, “We never thought of ~40x as a reasonable multiple for Netflix given the company’s decelerating growth outlook. However, at 18x, we believe the current (still very healthy) growth outlook is being undervalued, leaving room for multiple expansion to the low-to-mid 20x range, on top of 23% EPS growth in 2027.”

Global Engagement and International Content Strategy

Kraft argued that investors are placing too much emphasis on the amount of time U.S. subscribers spend on the platform. He said this focus ignores the broader global opportunity and stronger engagement trends outside the U.S., where time spent has increased year over year in each of the past four six-month periods.

The analyst also underscored Netflix’s advantage in international content creation. According to Kraft, more than 60% of the company’s programming is now produced outside the U.S., a shift he believes will support the firm’s ability to maintain its leadership position worldwide.

Platform Potential and Role of Artificial Intelligence

Kraft added that Netflix’s brand strength, scale and operational capabilities give it the potential to evolve into a broader platform, rather than remain solely a producer and programmer of its own titles.

He also described artificial intelligence as “more friend than foe” for the company. As a business that has relied on technology since its inception, Kraft believes Netflix is well positioned to deploy AI across areas such as content creation, user personalization and advertising, and to do so more effectively than competing streaming services.