Warner Brothers is proceeding with a merger with Paramount after Netflix's withdrawal, a transition that triggers a multi-billion dollar breakup fee payment to Netflix.
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Why I'm Buying Netflix Stock (And Why You Should Too)
Mar 4, 2026
Parkev Tatevosian, CFA, presents a bullish case for Netflix following its strategic decision to withdraw from a $70 billion acquisition bid for Warner Brothers Studios. He argues that this move preserves the company's balance sheet, avoids excessive debt, and allows management to focus on organic growth and core competencies, which is expected to lead to higher revenue guidance and improved operating margins. The author calculates an intrinsic value of $124 per share for Netflix, supported by a $3 billion breakup fee and projected free cash flow growth to $30 billion by 2030, while noting that the resulting high leverage for Paramount could create future opportunities for Netflix to acquire distressed assets.
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Netflix is rated as a high-conviction buy with a $124 intrinsic value target, benefiting from a $3 billion breakup fee and a strategic focus on organic growth over costly acquisitions.
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