Netflix stock rebound: Deutsche Bank sees 35% upside despite YouTube threat

Netflix shares may have found a floor, according to Deutsche Bank, which issued a rare bullish call on the streaming giant even as competitors like YouTube continue to erode its market share. The upgrade comes at a critical juncture for the company, which has seen its stock tumble 24% year-to-date.

Why Deutsche Bank turned bullish on Netflix

Analyst Bryan Kraft upgraded Netflix to Buy with a $95 price target, implying roughly 35% upside from current levels. In a midday note, Kraft argued that the recent selloff has created a compelling entry point for investors.

Kraft cited three key factors behind his optimism: Netflix's brand strength and global scale, its competitive advantage in international production, and what he calls the market's misplaced obsession with US viewing time.

Valuation now offers a compelling entry point, Kraft said, adding that Netflix has the organizational expertise to broaden its position as a platform rather than limiting itself to a vertically integrated entertainment producer.

What is Netflix's international growth story?

Kraft's analysis suggests that Netflix's international footprint is undervalued. He pointed to the company's well-diversified geographic content production mix as evidence of a substantial lead over competitors in international markets.

The analyst also argued that focusing on US time spent overlooks the larger total addressable market and healthier engagement trends across Netflix's global operations. This perspective contrasts sharply with the bearish narrative dominating Wall Street.

How is YouTube threatening Netflix's dominance?

Not everyone shares Deutsche Bank's optimism. HSBC analyst Mohammed Khallouf warned this week that Netflix continues to lose ground to YouTube, which captured a record 14.2% share of US TV time in July, up 80 basis points year over year.

Netflix's share, meanwhile, fell to a multi-year low of 7.8%, down 100 basis points. Khallouf attributed this decline to weakening reception of Netflix's original content and YouTube's aggressive tactics to lock in top creators.

YouTube has been benefiting from a declining reception to Netflix's original content. Near-term recovery in engagement looks unlikely, Khallouf said.

What is YouTube doing to attract creators?

YouTube has been tightening its grip on top creators by offering direct financing, higher payouts, and priority marketing in exchange for exclusivity. The platform also launched a new Shows feature this summer that mimics Netflix-style episodic series.

These moves further blur the lines between video-sharing and traditional scripted streaming, potentially raising costs for Netflix as it seeks to build a rival creator-content library, according to Khallouf.

What do Netflix's latest earnings reveal?

Netflix's second quarter results did little to ease Wall Street concerns. Sales missed estimates, third quarter guidance was cautious, and hours viewed on the platform rose only 2% in the first half of the year.

The company also faces the sting of missing out on Warner Bros., which is now set to merge with Paramount. Netflix executives are left with uncertainty about the streamer's future growth as investors digest these developments.

What are the key risks for Netflix investors?

HSBC's Khallouf highlighted several headwinds, including rising streaming fatigue. US households' monthly SVOD spend increased 22% year over year to $70 in 2025, suggesting consumers are becoming more selective about their subscriptions.

Khallouf also expects upward pressure on Netflix's content spend as it seeks to shore up engagement and as established creators leverage their rising intellectual property values. These factors could weigh on subscriber retention, which has historically been Netflix's strongest metric.

Netflix stock performance at a glance

Netflix stock is down 13% in September alone, bringing the year-to-date decline to 24%. By comparison, the S&P 500 is up 11% on the year, highlighting the stark divergence between Netflix and the broader market.

With Deutsche Bank's upgrade now on the table, investors face a classic two-sided trade: one analyst sees value, while others see structural threats. The coming quarters will determine which side is right.