Morgan Stanley Names Netflix Its New Favorite in Media, Ditching Disney

Morgan Stanley named Netflix (NASDAQ:NFLX) its new top pick in the media and entertainment sector, replacing Disney, as the firm doubles down on the streaming giant’s upside potential following a recent stock dip.

The bank reaffirmed its Overweight rating on Netflix, noting the current weakness in the share price offers an attractive entry point, with over 30% potential upside to its revised price target of $1,150.

While the firm slightly lowered its advertising revenue expectations for 2025, it emphasized that Netflix’s core growth remains firmly subscription-driven. Ad-supported revenue is forecast to nearly double next year but will still contribute a modest portion—only 10-15% of total revenue growth and less than 5% of total revenue.

Upcoming first-quarter results, the first since the company stopped disclosing net subscriber additions, are expected to show around 3.4 million net new users, according to Morgan Stanley’s estimate. The firm says year-over-year growth may appear softer compared to the fourth quarter, due to typical seasonal ad slowdowns and the absence of major live sports content.

Nevertheless, Netflix continues to deliver, with its latest viewer engagement data reinforcing strong global demand for both original and licensed programming. Morgan Stanley believes the platform's unique content mix and growing production infrastructure position it for sustained momentum in the years ahead.