Citi has resumed coverage of Netflix (NFLX) with a buy rating and a $115 price target, suggesting over 20% upside from recent levels around $95, according to a CNBC report citing analyst Jason Bazinet.

The upgrade follows the collapse of potential merger talks with Warner Bros. Discovery (WBD). Without acquisition expenses, Citi anticipates Netflix will lift its full-year 2026 operating income margin guidance to about 32%, up from the prior 31.5% projection that included deal costs.

Free from regulatory hurdles tied to a possible takeover, Netflix could implement price increases as early as October 2026. Bazinet believes the streaming leader retains strong pricing power, countering earlier investor skepticism during any M&A review period.

A larger cash pile positions Netflix for accelerated share repurchases. Citi estimates this could deliver up to a 10% positive impact on the stock price.

Netflix, with roughly 222 million paid subscribers across 190 countries, leads the streaming sector. Its shares trade at $95.20 currently, above the broader analyst consensus target of $91.50 despite an Outperform rating from four analysts.

Bazinet flags one potential drag: advertising revenue growth. He projects $1.5 billion annually, below Wall Street's $2 billion consensus. Downward revisions here might offset some gains, though Citi sees Netflix maintaining dominance without near-term ad pressures.

Shares dipped modestly in Wednesday morning trading after the note.