Key Takeaways
- Rosenblatt Securities reduced Netflix’s price target to $95 from $96 while maintaining its Neutral stance
- Oppenheimer decreased its price objective to $120 from $135, retaining an Outperform recommendation
- First-quarter revenue reached $12.25 billion, representing a 16.2% annual increase and exceeding consensus forecasts
- Second-quarter 2026 projections fell below expectations; annual outlook remains unrevised
- Company co-founder Reed Hastings to step down from non-executive Chairman role
The streaming giant delivered impressive first-quarter results, yet cautious second-quarter projections have prompted Wall Street firms to adjust their forecasts downward.
Rosenblatt Securities revised its price objective to $95 from the previous $96, sustaining a Neutral position. The adjustment reflects a lowered 2026 adjusted EBITDA projection. The investment firm applies a 24x enterprise value-to-EBITDA multiple based on 2026 forecasts.
According to Rosenblatt’s analysis, Netflix is positioned to achieve 24% compound annual growth in adjusted EBITDA between 2025 and 2027, alongside 15% revenue expansion during the identical timeframe. The firm characterizes the streaming platform as robust yet approaching maturity.
Oppenheimer delivered a more substantial reduction, slashing its target to $120 from $135 while preserving its Outperform designation. The brokerage acknowledged overly optimistic assumptions regarding the domestic price adjustment’s influence.
Management projects second-quarter revenue expansion of 12% when currency fluctuations are excluded, or 14% measured over a two-year span. This represents a deceleration from the 15% first-quarter growth rate. Oppenheimer’s valuation applies a 30x multiple to its 2027 earnings per share projection.
First-quarter revenue totaled $12.25 billion, marking a 16.2% year-over-year advancement. Results exceeded both Evercore ISI and consensus Wall Street projections of $12.18 billion.
Operating income achieved $3.96 billion with margins of 32.3%. While surpassing Evercore ISI’s forecast, it marginally underperformed broader market expectations.
Advertising Tier Gains Momentum
The advertisement-supported subscription option continues expanding its footprint. Ad-tier memberships represented 60% of first-quarter subscriber additions. Oppenheimer highlighted the September non-programmatic advertising cycle timing and competitive pressure from Warner Bros. Discovery as headwinds affecting second-quarter revenue acceleration.
The investment firm anticipates improved performance in the latter half if advertising market conditions stabilize and additional content launches materialize.
International markets delivered encouraging results. EMEA territories posted 12% revenue growth, LATAM regions increased 18%, and APAC markets surged 19% during the first quarter.
Wall Street Opinion Divided
Several analysts maintained their positive outlooks. UBS preserved its Buy recommendation and $130 valuation, emphasizing the company’s content expenditure strategy and live programming initiatives. The firm anticipates 14% UCAN revenue growth in the second quarter.
Needham similarly sustained its Buy rating, highlighting emerging mobile features such as vertical video format and video podcast offerings as mechanisms to reduce subscriber attrition and enhance pricing flexibility.
Barclays lowered its target to $110 from $115 while keeping an Equalweight stance. The firm expressed concern regarding management’s decision to maintain existing guidance parameters.
William Blair reaffirmed its Outperform rating, acknowledging successful price increases implemented across both advertising-supported and ad-free subscription tiers.
The company’s proprietary quality engagement metric achieved record levels during the first quarter, propelled by innovative content formats encompassing video podcasts and live event programming.
Management expressed optimism regarding the World Baseball Classic and deepening NFL partnership, although Oppenheimer doesn’t anticipate Netflix pursuing comprehensive seasonal sports broadcasting rights.
The streaming service also announced that co-founder Reed Hastings will decline reelection to the non-executive Chairman position.
Full-year 2026 guidance remained intact. Oppenheimer’s annual revenue growth estimate of 13% year-over-year suggests subscription revenue advancement of 10%, incorporating an assumption of $3 billion in advertising-generated revenue.
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