These specialists believe that Netflix will remain strong even if it is unable to acquire Warner Bros.

Main Insights

• Wedbush analysts are confident that Netflix will remain strong, even if its proposed acquisition of Warner Bros. Discovery does not materialize.
• According to these analysts, Netflix's business is robust and thriving independently.

Should Netflix be unable to secure Warner Bros. Discovery, it is not seen as a significant setback.

This perspective—that Netflix (NFLX) will continue to perform well regardless of whether its multibillion-dollar merger with Warner Bros. Discovery (WBD) is completed—was reaffirmed by Wedbush analysts on Friday. They maintained their optimistic outlook and set a $115 price target for Netflix shares, which is nearly 50% higher than the current stock price and aligns with the average target on Wall Street, as reported by Visible Alpha.

Wedbush's commentary came at the end of a week marked by new developments in the acquisition process, which was first announced in December. Warner Bros. has resumed negotiations with another interested party, Paramount Skydance (PSKY), which has at times pursued a hostile takeover. This has introduced new uncertainty and the potential for additional competing offers.

Implications for Investors

With Warner Bros. Discovery reopening discussions with Paramount Skydance, Netflix may have to increase its offer if it wishes to proceed. However, some market experts suggest that Netflix could simply walk away from the deal without negative consequences.

Investors are also weighing whether regulatory challenges could ultimately prevent Netflix's acquisition from being approved.

Wedbush analysts emphasized that Netflix does not require this merger to succeed, stating that the company is already in a strong position thanks to its expanding global advertising operations.

In its most recent quarterly report, Netflix announced nearly 18% year-over-year revenue growth for the fourth quarter, along with improved operating margins. The company has projected a 15% increase in sales for the current quarter.

Although Netflix shares have declined by over 20% in the past year, they recently saw a gain of more than 1%. Meanwhile, Warner Bros. shares were slightly higher on Friday afternoon, while Paramount's stock slipped by about 1%.