Netflix shares are drawing positive reactions from Wall Street analysts following a strong second-quarter earnings report.
Despite a slight dip in premarket trading, the streaming giant’s better-than-expected results and upgraded full-year revenue outlook have prompted several firms to raise their price targets on the stock.
Strong Q2 results and revenue growth
Netflix’s second-quarter earnings and revenue both came in ahead of analyst expectations, with revenue growing 16% year over year.
The company also raised its full-year revenue guidance, signaling continued confidence in its business trajectory.
However, Netflix shares were down 2.55% in premarket trading as the company cautioned that operating margins in the second half of 2025 would be lower than the first.
The decline is attributed to “higher content amortization and sales and marketing costs associated with our larger second half slate.”
Nonetheless, analysts largely viewed the update as positive.
Several firms raised their price targets, noting Netflix’s ongoing evolution as a streaming leader with expanding monetization channels and content strategy.
Price target revisions reflect optimism
Piper Sandler, Morgan Stanley, Wells Fargo, Jefferies, UBS, and JPMorgan were among the firms that revised their forecasts.
Piper Sandler raised its price target to $1,500 from $1,400, maintaining an overweight rating.
Analyst Thomas Champion emphasized confidence in management, pointing to the $1 billion increase in full-year revenue guidance as a signal of strength. He described Netflix as “a defensive name with multiple upside levers.”
Morgan Stanley also reiterated its overweight rating and raised its target to $1,500.
Analyst Benjamin Swinburne highlighted the potential for Netflix’s newly implemented advertising technology to double ad revenue in 2025.
Swinburne also noted the company’s growing use of generative AI to support content and product development, further reinforcing his bullish outlook.
Wells Fargo took its target even higher, moving to $1,560 from $1,500, with analyst Steven Cahall citing the company’s successful monetization of password sharing and expansion into ad-supported tiers.
He described Netflix as evolving into “a larger revenue platform” capable of reinvesting in content and technology to drive future growth.
Longer-term tailwinds from advertising and cost discipline
Jefferies echoed much of this sentiment, raising its price target to $1,500 while maintaining a buy rating.
Analyst James Heaney sees near-term growth driven by the crackdown on password sharing and the launch of ad-supported subscriptions.
Heaney also expects “continued discipline on content spend,” resulting in robust free cash flow margins exceeding 25% over the long term.
UBS raised its price target to $1,495 from $1,450 and reiterated its buy rating.
Analyst John C. Hodulik noted supportive industry trends and competitive dynamics, including a pullback in content spend by competitors, which could enhance Netflix’s operating leverage.
JPMorgan was somewhat more cautious, raising its target to $1,300 from $1,230 while keeping a neutral rating.
Analyst Doug Anmuth pointed to foreign exchange benefits and stronger-than-expected subscriber growth, particularly late in the quarter, fueled by popular titles like Squid Game Season 3 and Ginny & Georgia Season 3.
As Netflix continues to adjust its business model and strategy, analysts appear largely optimistic about the streaming giant’s prospects for sustained growth and profitability through 2025.
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