Key Takeaways
- Rosenblatt decreased Netflix’s price objective from $96 down to $95 while retaining its Neutral stance
- Oppenheimer reduced its price objective significantly from $135 to $120, maintaining its Outperform recommendation
- First quarter revenue reached $12.25 billion, representing a 16.2% annual increase and surpassing analyst projections
- Second quarter 2026 projections disappointed investors; annual forecasts remained steady
- Company co-founder Reed Hastings plans to step down from his role as non-executive Chairman
Netflix delivered impressive first-quarter results, but cautious second-quarter projections have prompted Wall Street firms to recalibrate their expectations.
Rosenblatt Securities adjusted its price objective downward to $95 from $96, maintaining a Neutral position. The revision stems from lowered 2026 adjusted EBITDA projections. The research firm applies a 24x enterprise value to EBITDA multiple based on its 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 brokerage characterizes Netflix as a robust yet increasingly mature enterprise.
Oppenheimer executed a more substantial reduction, lowering its target from $135 down to $120 while preserving its Outperform designation. The firm acknowledged its prior models were overly optimistic regarding the impact of domestic pricing adjustments.
Netflix’s management projected Q2 revenue expansion of 12% when currency fluctuations are excluded, equivalent to 14% growth on a two-year comparative basis. This represents a deceleration from Q1’s 15% 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. The figure exceeded both Evercore ISI and consensus Wall Street estimates of $12.18 billion.
Operating income achieved $3.96 billion with margins of 32.3%. The result surpassed Evercore ISI’s forecast but came in below broader market expectations.
Advertising Business Takes Center Stage
The advertising-supported subscription tier continues its momentum. Ad-tier subscriptions represented 60% of first quarter net subscriber additions. Oppenheimer identified the September non-programmatic advertising cycle timing and competition from Warner Bros. Discovery as headwinds affecting Q2 revenue projections.
The investment firm anticipates stronger performance in the latter half of 2026 if advertising market conditions remain stable and additional content launches materialize.
International markets delivered strong results. EMEA territories posted 12% revenue growth, LATAM increased 18%, and APAC markets advanced 19% during Q1.
Wall Street Divided on Future Prospects
Several analysts opted against target reductions. UBS maintained its Buy recommendation and $130 price objective, emphasizing Netflix’s content spending and live event strategy. The firm projects UCAN market revenues will expand 14% in Q2.
Needham similarly preserved its Buy rating, highlighting emerging mobile features including vertical video format and video podcast offerings as mechanisms to reduce subscriber churn and strengthen pricing flexibility.
Barclays lowered its target to $110 from $115, keeping an Equalweight rating. The firm expressed concern over Netflix’s decision to maintain its existing guidance parameters.
William Blair reaffirmed its Outperform rating, highlighting successful recent price increases across both advertising-supported and traditional subscription plans.
Netflix’s proprietary quality engagement measurement reached record levels in Q1, fueled by expanded content offerings including video podcasts and live programming.
Management expressed optimism about the World Baseball Classic and deepening NFL partnership, though Oppenheimer doesn’t anticipate Netflix pursuing comprehensive full-season sports broadcasting rights.
Netflix confirmed that co-founder Reed Hastings will not seek reelection to his non-executive Chairman position.
Full-year 2026 projections remained unmodified. Oppenheimer’s annual revenue growth estimate of 13% year-over-year suggests subscription revenue growth of 10%, based on anticipated advertising revenue of $3 billion.
