TLDR
- Rosenblatt cut its Netflix price target from $96 to $95, maintaining a Neutral rating
- Oppenheimer cut its target from $135 to $120, keeping an Outperform rating
- Netflix Q1 revenue hit $12.25 billion, up 16.2% year-over-year, beating estimates
- Q2 2026 guidance came in slightly soft; full-year guidance was left unchanged
- Co-founder Reed Hastings will not stand for reelection as non-executive Chairman
Netflix posted a solid first quarter but softer second-quarter guidance has analysts trimming their numbers.
Rosenblatt lowered its price target to $95 from $96, keeping a Neutral rating. The cut was driven by a reduced 2026 adjusted EBITDA estimate. The firm values Netflix at 24 times enterprise value to EBITDA against its 2026 estimates.
Rosenblatt expects Netflix to grow adjusted EBITDA at a 24% compound annual growth rate from 2025 to 2027, with revenue growing at 15% over the same period. The firm describes Netflix as a strong but maturing business.
Oppenheimer made a larger cut, dropping its target from $135 to $120 while keeping an Outperform rating. The firm said it had been too aggressive in modeling the impact of the U.S. price increase.
Netflix guided for Q2 revenue growth of 12% excluding foreign exchange, or 14% on a two-year basis. That compares to 15% growth in Q1. Oppenheimer’s price target is based on 30 times its 2027 earnings per share estimate.
Q1 revenue came in at $12.25 billion, a 16.2% year-over-year increase. That beat both Evercore ISI and broader Street estimates of $12.18 billion.
Operating income reached $3.96 billion with a 32.3% margin. It topped Evercore ISI’s estimate but fell short of broader Street expectations.
Advertising Shift in Focus
The ad-supported tier continues to gain ground. Advertising accounted for 60% of Q1 net additions. Oppenheimer flagged the timing of the non-programmatic advertising cycle in September and distraction from Warner Bros. Discovery as factors weighing on Q2 revenue growth.
The firm expects a stronger second half if the ad market holds up and more programming comes online.
International performance was a bright spot. EMEA revenue grew 12%, LATAM rose 18%, and APAC climbed 19% in Q1.
Analyst Sentiment Remains Mixed
Not everyone trimmed targets. UBS kept its Buy rating and $130 price target, pointing to Netflix’s content investments and live events strategy. It expects UCAN revenues to grow 14% in Q2.
Needham also held its Buy rating, citing new mobile products like vertical video and video podcasts as tools to lower churn and improve pricing power.
Barclays cut its target to $110 from $115, maintaining an Equalweight rating. It flagged Netflix’s unchanged guidance range as a concern.
William Blair reiterated Outperform, noting the success of recent price increases across both ad and non-ad plans.
Netflix’s internal quality engagement metric hit an all-time high in Q1, driven by new content formats including video podcasts and live events.
The company discussed the World Baseball Classic and its expanding NFL relationship favorably, though Oppenheimer does not expect Netflix to bid for full-season sports rights.
Netflix also confirmed that co-founder Reed Hastings will not stand for reelection as non-executive Chairman.
Full-year 2026 guidance was left unchanged. Oppenheimer’s full-year revenue growth forecast of 13% year-over-year implies subscription revenue growth of 10%, assuming $3 billion in advertising revenue.
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