Key Takeaways
- Rosenblatt Securities reduced Netflix’s price target to $95 from $96 while maintaining a Neutral stance
- Oppenheimer slashed its target to $120 from $135 but retained an Outperform rating
- First quarter revenue reached $12.25 billion, marking 16.2% annual growth and surpassing expectations
- Second quarter 2026 projections disappointed investors; annual outlook remains intact
- Reed Hastings, company co-founder, will step down from his non-executive Chairman role
The streaming platform delivered impressive first-quarter results, yet a lackluster forecast for the upcoming quarter has prompted Wall Street to adjust expectations downward.
Rosenblatt Securities revised its price objective to $95 from the previous $96, maintaining its Neutral position on the stock. This adjustment stems from a downward revision to the firm’s 2026 adjusted EBITDA projections. The firm’s valuation methodology applies a 24x enterprise value to EBITDA multiple based on 2026 forecasts.
According to Rosenblatt’s analysis, Netflix is positioned to achieve a 24% compound annual growth rate in adjusted EBITDA between 2025 and 2027, alongside 15% revenue expansion during the same timeframe. The investment firm characterizes the streaming leader as a robust yet increasingly mature enterprise.
Oppenheimer implemented a more substantial reduction, lowering its price objective to $120 from $135 while preserving its Outperform recommendation. The firm acknowledged its forecasts had been overly optimistic regarding the impact of recent U.S. pricing adjustments.
Management projects second-quarter revenue expansion of 12% when excluding currency fluctuations, equivalent to 14% on a two-year stacked basis. This represents a deceleration from the 15% growth recorded in the first quarter. Oppenheimer’s valuation framework applies a 30x multiple to its 2027 earnings per share projection.
First-quarter revenue totaled $12.25 billion, representing 16.2% year-over-year expansion. This performance exceeded both Evercore ISI and consensus Street projections of $12.18 billion.
Operating profit achieved $3.96 billion with a 32.3% margin. While this surpassed Evercore ISI’s forecast, it fell marginally below broader market expectations.
Advertising Momentum Builds
The advertisement-supported subscription tier continues expanding its footprint. Advertising-based plans represented 60% of first-quarter subscriber additions. Oppenheimer identified the September timing of non-programmatic advertising cycles and competitive pressure from Warner Bros. Discovery as headwinds affecting second-quarter revenue projections.
The firm anticipates stronger performance during the latter half of the year, contingent on sustained advertising market strength and enhanced content availability.
International markets demonstrated robust momentum. European, Middle Eastern, and African markets posted 12% revenue growth, Latin American operations surged 18%, and Asia-Pacific territories climbed 19% during the first quarter.
Wall Street Perspectives Diverge
Not all analysts opted to reduce their targets. UBS maintained its Buy recommendation and $130 price objective, emphasizing the platform’s content expenditures and live programming initiatives. The firm forecasts 14% UCAN revenue growth for the second quarter.
Needham similarly preserved its Buy rating, highlighting emerging mobile offerings such as vertical video formats and video podcasts as mechanisms to reduce subscriber attrition and enhance pricing leverage.
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 view, emphasizing the effectiveness of recent price increases implemented across both advertising-supported and premium subscription tiers.
The company’s proprietary quality engagement indicator reached record levels during the first quarter, fueled by diversified content formats encompassing video podcasts and live programming.
Executives discussed favorable progress with the World Baseball Classic and expanding NFL partnership, though Oppenheimer doesn’t anticipate aggressive bidding for comprehensive sports broadcasting rights.
The streaming giant also announced that co-founder Reed Hastings will decline renomination as non-executive Chairman.
Full-year 2026 projections remained unaltered. 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-derived revenue.
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