Key Takeaways
- Rosenblatt Securities reduced Netflix’s price target to $95 from $96 while maintaining a Neutral stance
- Oppenheimer decreased its target to $120 from $135, retaining an Outperform rating
- First quarter revenue reached $12.25 billion, representing 16.2% annual growth and surpassing analyst expectations
- Second quarter 2026 forecast disappointed investors; annual projections remain intact
- Reed Hastings, company co-founder, will step down from his role as non-executive Chairman
The streaming giant delivered robust first-quarter results, yet conservative projections for the upcoming quarter prompted Wall Street firms to adjust their financial models.
Rosenblatt Securities adjusted its price objective downward to $95 from $96, maintaining its Neutral outlook on the stock. The revision reflects a more conservative 2026 adjusted EBITDA projection. The research firm applies a 24x enterprise value-to-EBITDA multiple based on its 2026 financial forecasts.
The firm anticipates Netflix will achieve a 24% compound annual growth rate in adjusted EBITDA between 2025 and 2027, while revenue is projected to expand at a 15% CAGR during the same timeframe. Analysts characterize the streaming platform as a robust yet increasingly mature enterprise.
Oppenheimer delivered a more substantial reduction, slashing its target to $120 from $135 while preserving its Outperform designation. The firm acknowledged its prior forecasts were overly optimistic regarding the impact of domestic pricing adjustments.
The company projected second-quarter revenue growth of 12% on a constant currency basis, equivalent to 14% growth on a two-year stacked comparison. This represents a deceleration from the 15% expansion recorded in the first quarter. Oppenheimer’s valuation framework applies a 30x multiple to its 2027 earnings per share projection.
First quarter top-line performance totaled $12.25 billion, marking a 16.2% year-over-year increase. The figure exceeded both Evercore ISI’s forecast and consensus Wall Street estimates of $12.18 billion.
Operating profit delivered $3.96 billion with a 32.3% margin. While the result surpassed Evercore ISI’s expectations, it came in marginally below broader analyst consensus.
Ad-Supported Tier Gains Momentum
The advertising-supported subscription option continues to demonstrate strong traction. Ad-tier subscriptions represented 60% of all new customer additions during the first quarter. Oppenheimer identified the timing of non-programmatic advertising cycles in September and competitive pressure from Warner Bros. Discovery as potential headwinds for second-quarter revenue performance.
Analysts anticipate improved momentum in the latter half of the year, contingent on sustained advertising market conditions and expanded content releases.
Global markets showed impressive expansion. EMEA territories posted 12% revenue growth, Latin America surged 18%, and Asia-Pacific climbed 19% during the quarter.
Wall Street Perspectives Diverge
Not all analysts moved to lower their projections. UBS maintained its Buy recommendation and $130 price objective, emphasizing the company’s strategic content investments and live programming initiatives. The firm anticipates 14% revenue growth in the UCAN region during the second quarter.
Needham similarly preserved its Buy rating, highlighting innovative mobile features such as vertical video formats and video podcasting as mechanisms to reduce subscriber churn and enhance pricing flexibility.
Barclays trimmed its target to $110 from $115 while keeping an Equalweight rating. Analysts expressed concern over the company’s decision to maintain its existing guidance parameters.
William Blair reaffirmed its Outperform view, emphasizing the positive reception of recent price adjustments across both advertising-supported and premium subscription tiers.
The streaming service’s proprietary quality engagement measurement reached record levels during the first quarter, fueled by expanded content offerings including video podcasts and live programming.
Management expressed optimism about the World Baseball Classic partnership and the evolving NFL collaboration, although Oppenheimer analysts don’t anticipate Netflix pursuing comprehensive seasonal sports broadcasting rights.
The company also announced that co-founder Reed Hastings will not seek reelection to his position as non-executive Chairman of the board.
Annual guidance for 2026 remained unmodified. Oppenheimer’s full-year revenue growth estimate of 13% year-over-year suggests subscription revenue will increase by 10%, incorporating an assumption of $3 billion in advertising-generated revenue.
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