Key Takeaways
- Rosenblatt reduced its Netflix price target to $95 from $96 while maintaining its Neutral rating
- Oppenheimer lowered its target to $120 from $135 while keeping its Outperform rating
- First quarter revenue reached $12.25 billion, representing 16.2% growth year-over-year and exceeding projections
- Second quarter 2026 guidance disappointed investors; annual guidance remained steady
- Reed Hastings, company co-founder, will step down from his position as non-executive Chairman
The streaming giant delivered strong first quarter results, yet disappointing projections for the upcoming quarter prompted analysts to adjust their forecasts downward.
Rosenblatt Securities revised its price target downward to $95 from $96 while maintaining its Neutral stance. The adjustment stemmed from a lowered adjusted EBITDA projection for 2026. The investment firm applies a 24 times enterprise value to EBITDA multiple based on its 2026 forecasts.
The firm anticipates Netflix will achieve a 24% compound annual growth rate for adjusted EBITDA between 2025 and 2027, while revenue expands at 15% during the same timeframe. Rosenblatt characterizes the streaming platform as a robust yet evolving enterprise.
Oppenheimer executed a more substantial reduction, bringing its target down to $120 from $135 while maintaining its Outperform designation. The firm acknowledged overestimating the financial impact of the U.S. subscription pricing adjustment.
Management projected Q2 revenue growth of 12% when excluding currency fluctuations, equivalent to 14% on a two-year comparative basis. This represents a deceleration from the 15% expansion recorded in Q1. Oppenheimer’s valuation applies a 30 times multiple to its 2027 earnings per share projection.
First quarter revenue totaled $12.25 billion, marking a 16.2% increase compared to the prior year period. The figure surpassed both Evercore ISI projections and consensus Street estimates of $12.18 billion.
Operating income achieved $3.96 billion with margins reaching 32.3%. The result exceeded Evercore ISI’s forecast while falling slightly below broader market expectations.
Advertising Tier Gains Momentum
The ad-supported subscription option continues its expansion trajectory. Advertising-backed plans represented 60% of new subscriber additions during Q1. Oppenheimer identified the September timing of non-programmatic advertising cycles and competitive pressures from Warner Bros. Discovery as headwinds affecting Q2 revenue projections.
The investment firm anticipates stronger performance during the latter half of the year, contingent on stable advertising market conditions and increased content availability.
International markets delivered impressive results. EMEA region revenue expanded 12%, LATAM increased 18%, and APAC advanced 19% during the first quarter.
Wall Street Perspectives Diverge
Several analysts maintained their previous positions. UBS preserved its Buy rating alongside a $130 price target, emphasizing the company’s content spending strategy and live programming initiatives. The firm projects 14% UCAN revenue growth for Q2.
Needham sustained its Buy recommendation, highlighting emerging mobile features such as vertical video formats and video podcasts as mechanisms to reduce subscriber attrition and enhance pricing flexibility.
Barclays adjusted its target downward to $110 from $115 while retaining an Equalweight rating. The firm expressed concern regarding the company’s decision to maintain its existing guidance parameters.
William Blair reaffirmed its Outperform rating, acknowledging the positive reception of recent pricing adjustments across both advertising-supported and premium subscription tiers.
The company’s proprietary quality engagement metric reached record levels during Q1, propelled by diverse content offerings including video podcasts and live programming.
Management provided positive commentary regarding the World Baseball Classic and its deepening NFL partnership, although Oppenheimer does not anticipate the platform pursuing comprehensive sports season broadcasting rights.
The company announced that co-founder Reed Hastings will decline reelection to his role as non-executive Chairman.
Annual guidance for 2026 remained unmodified. Oppenheimer’s full-year revenue growth estimate of 13% year-over-year suggests subscription revenue advancement of 10%, incorporating an assumption of $3 billion in advertising revenue.
