When Netflix withdrew from the bidding competition for Warner Bros. Discovery At the end of February, its shares rose and Wall Street analysts praised the streaming giant’s financial discipline. It then received a $2.8 billion breakup fee from Paramount and boosted its financial outlook further by raising prices for new subscriptions in late March in the United States. Now what?
Netflix co-CEO Ted Sarandos recently called Warner Bros. As a special opportunity yet not worth overpaying for, he traveled to Europe to launch an international charm offensive in a sign that the streamer had already moved on.
This week, Netflix unveiled a bigger play for young audiences with the launch of a children’s gaming app, the renewal of two preschool series and a new show based on one of the most enduring children’s songs of all time.
Now, after this flurry of activity, Wall Street is poised to update Netflix’s earnings for the first time since the end of the WBD auction. Among other things, analysts will hear on April 16 any insight into management’s plans for how to monetize break-up fees, the impact of recent price increases and whether expectations for strong growth in ad revenue this year are on track.
“We got back to focusing on the stock before the Warner Bros. deal, which was a few things,” says John Pelton, portfolio manager at Gabelli Funds’ Gabelli Growth Innovators ETF. Hollywood Reporter. “The first number was engagement trends. Investors will focus on that metric and the trends there, since engagement is really the lifeblood of the company and is really what fuels long-term revenue and earnings growth.”
The second is advertising business. “The advertising business has really started to expand into a good, high-margin, multi-billion-dollar revenue business,” Pelton says. “I think we’re entering another phase in the ad business, where it’s becoming one of the largest global advertising platforms at scale. The focus will be on improvements in things like ad formats, ad technology, targeting, and personalization. The third thing is that there’s just been a price increase in the US, so the focus will be on early feedback on how customers are responding to that.”
Finally, Belton is monitoring the long-term trend of content spending. “Now that the Warner Bros. deal is done, what does content spending look like over the next two years?” He says. “They indicated that the cost of content will accelerate slightly this year. They also indicated, at the same time, that they are not close to peak margins yet.”
Similar themes made their way into stock analysts’ Netflix earnings previews. less, THR He compiled some forecasts for Netflix’s Q1 2026 earnings report and related management call.
analyst: Jessica Reeve Ehrlich, Bank of America Securities
Stock rating and target price: Purchase, $125
Fast food: In a recent report, the expert said that the live streaming giant is back in business. After all, “Q1 results represent Netflix’s first earnings call following the decision to walk away from the WBD acquisition, and we expect management to address that decision head-on.”
But Reeve Erlich doesn’t expect smooth sailing. “We see several headwinds to Netflix’s share performance in the near term,” she emphasized. “On the one hand, amid an uncertain macro environment, Netflix appears defensive given flat subscriber revenues. On the other hand, concerns regarding engagement and AI trends are currently difficult to refute.”
The analyst also commented on the price increases in the US under the heading “streamlined inflation”, offering: “Although a price increase is expected (implicit in revenue guidance for calendar year 2026), the timing appears earlier than the market expected. Given the overall concerns about share over the past 12-18 months, we view these increases as evidence of Netflix’s confidence in its fundamental strength and durability. This strengthens our view on management’s ability to drive average revenue per user (ARPU) growth on an even larger global scale.” Much.”
Explaining the ‘Buy’ rating, she noted: “Netflix shares will be fueled by continued positive subscriber and earnings momentum, as well as a long runway for announcements and direct opportunities. Supported by its world-class brand, leading global subscriber scale, position as an innovator and increased visibility into growth engines, we believe Netflix shares will perform well.”
analyst: Alicia Reese, Wedbush Securities
Stock rating and target price: Beats, $118, up from $115
Fast food: “Netflix is poised for significant global advertising growth, while recent price increases could provide a strong boost to profitability this year,” Rees wrote in an upbeat preview note. “We expect domestic resilience, but European resistance to price increases could be a burden this year as Netflix works to resolve legal challenges.”
That was a reference to a Rome court’s recent ruling that Netflix illegally issued price increases from 2017 to 2024 by changing its subscription terms without sufficient notice and reason. The ruling came amid similar lawsuits across the European Union, including suits filed in Germany, the Netherlands and Poland.
“If Netflix overcomes the European challenges of increasing subscription prices, we may see further rise in its share price this year,” the analyst stressed. “We remain optimistic about Netflix’s overall opportunity to grow revenues in 2026 on both local subscription rates and advertising revenue, while continuing to expand its global footprint.”
Reese forecast first-quarter revenue of $12.22 billion, compared to a Wall Street consensus of $12.18 billion and guidance of $12.16 billion, and earnings per share of 77 cents, compared to consensus and guidance of 76 cents. It also noted Netflix’s “$2.8 billion in additional spending on content and ad set improvements this year from World Bank deal breakup fees, which we expect to extend its competitive lead.”
analyst: Sean Diffley, Morgan Stanley
Stock rating and target price: Overweight, $115, up from $110 previously
Fast food: “Reclaim the Crown” was the headline Diffley chose when he took over Netflix’s headline coverage for the company, reiterating an “overweight” rating and raising his price target by $5. He concluded, “Netflix without Warner Bros. is a cleaner, clearer, less volatile business with greater degrees of freedom and less leverage.” “The multiplier should be reassessed back to 30+ times as revenue growth outpaces hours worked and AI shifts from risk to opportunity.”
Participation concerns were also a focus for him. “Sentiment on the pace of share growth and margin expansion appears to have bottomed out,” the analyst suggested, anticipating sustained double-digit revenue growth going forward. While the planned investments will slow the pace of profit margin expansion this year, he stressed his belief in the company’s pricing strength and operating leverage.
Overall, the expert sees the stock as “too cheap” compared to the company’s growth momentum and durability. In fact, he highlighted that in the past, one of the best times to own Netflix stock was to follow announcements of price increases in the US. He noted an average return of 20% in the trailing nine months when analyzing the price rise since 2015.
Diffley also mentioned Netflix’s recent deal for Ben Affleck’s AI company InterPositive. “Netflix can flip the script and move into the category of AI winners starting with InterPositive that leads to significant cost savings and expands what is creatively possible,” he concluded.
analyst: Daniel Cornus, The Standard
Stock rating and target price: Hold, no target price
Fast food: Cornos maintained its “hold” rating on the streaming stock ahead of the earnings report. “We have seen Wall Street in general gushing over the recent price rises (unexpected solely from a timing and volume perspective), and for some reason… “Even after removing the 10 million net addition from our forecast due to the expected impact from higher prices and disruption, we still end up with an additional 100 basis points of revenue growth and a little more than that in additional operating margin dollars,” he wrote.
He continued: “The impact is not limited to 2016 only; we are now further ahead of the Street in terms of revenues and operating income for 27, including the possibility of another price adjustment later next year.” “We now expect Netflix to be able to grow its revenues at a rate of the mid-teens in at least the medium term.”
However, “that’s only half the story,” the analyst asserted with cautionary words: “The only time in recent history that Netflix has raised prices during a difficult macro period was in ’22, and subscriptions have missed expectations (to be fair, between the coronavirus moving forward and many other competitors and the lack of AVOD offering, that’s a fragile data point).”
But he also said that in terms of content strategy, “Netflix is clearly making a strategic pivot away from quantity, which is its differentiator, to quality, the latter of which is a much more expensive strategy.” In this context, the analyst noted, “All eyes will remain on any color of engagement – there is a reason we are going through the entire M&A saga, and nothing has fundamentally changed since investors first started showing concern.”
analyst: John Blackledge, T.D. Quinn
Stock rating and target price: Purchase, $112
Fast food: “We expect net paid additions to be 4.56 million, reflecting seasonality and a strong slate of original assets, including Bridgerton Season 4 and Night agent “Season 3,” the analyst wrote. “The first quarter should benefit as well Strange things Final viewership.
Blackledge also noted that Netflix shares are up 9 percent year to date, compared to the near-flat S&P 500 stock index. The expert pointed out that “stocks rebounded sharply after the administration’s decision on February 26 to withdraw from the World Bank deal.”
Addressing price increases in the US, for the Standard tier with ads from $7.99 to $8.99, the Standard plan from $17.99 to $19.99, and the Premium plan from $24.99 to $26.99, Blackledge highlighted that it amounts to an 11 percent increase on average.
“We estimate that U.S. and Canadian average revenue per member (ARM) rose 6 percent year-over-year in 2016,” he concluded. “These increases could trickle down to existing users in the coming months.”
analyst: Mark Mahaney, Evercore ISI
Stock rating and target price: Excellence, $115
Fast food: The expert called the Street’s Q1 estimates “very reasonable,” and looked forward to the current Q2, saying, “Netflix will likely benefit from the continued strong content slate and recently announced increase in the US. We also see the Street’s Q2 operating income as attainable given seasonality and historical guidance.”
For all of 2026, Mahaney expects Netflix to “either maintain or modestly raise its revenue, operating margin and free cash flow guidance.”
He even suggested: “In terms of potential stock reaction, we assume Netflix will trade modestly if the company does not increase its 2026 guidance.”
Regarding the US price hike, the analyst said: “At similar price levels, Netflix remains broadly in line with its slightly higher peers, but with a different content and scale advantage. In the $8-$12 range, ad-supported shows from Disney+ (~$11.99), Peacock (~$8) and Paramount+ (~$9) compete closely, while Amazon Prime Video (~$9 with ads) comes in slightly lower. In the middle tier (~$15 – $18), Netflix’s new standard price sits above Disney+ (~$15.99 without ads) but remains similar to HBO Max and Hulu (~$16-$18) d (~$20-$25), the Netflix Premium tier is at the higher end of the market, where HBO Max ($23) and other bundled offerings (the $30 Disney+ bundle) are also clustered, suggesting limited price disruption despite the major increases.
analyst: Brian Betz, BMO Equity Research
Stock rating and target price: Excel, $135
Fast food: Betz recently reiterated his “outperform” rating, citing the stock’s “cleaner story” post-WBD.
Speaking about the price rise, he said: “While we suspect that recent US price increases were likely part and parcel of initial 2026 guidance, we are raising our 2026 revenue estimate by 0.9 percent to $51.6 billion to reflect higher US prices.”
Betz also detailed some of the math. “We estimate that recent U.S. price increases should contribute about $1.5 billion in additional revenue in 2026, providing 3.3% growth from pricing alone, as bears question the durability of pricing power amid slowing share growth,” he wrote.
Overall, he concluded, “stocks remain attractive.” “We’re seeing a clearer story for Netflix following the collapse of the WBD merger, as investors refocus on core/near-term fundamentals and look for evidence that Netflix can scale a massive $10+ billion advertising business over the long term,” Betz explained.
