Street Calls of the Week
Investing.com - Goldman Sachs has maintained its Neutral rating on Netflix (NASDAQ:NFLX) with a price target of $1,300, according to a research note published Wednesday. According to InvestingPro data, Netflix is currently trading above its Fair Value, with the stock showing a remarkable 56.93% return over the past year.
The investment bank highlighted three key variables likely to influence Netflix stock performance in 2026: execution of strong content across television and film categories, continued operating margin expansion while investing in growth initiatives, and scaling of the ad-supported subscription tier. The company maintains healthy margins, with a gross profit margin of 48.49% and strong revenue growth of 14.84% in the last twelve months.
Goldman Sachs analyst Eric Sheridan noted that potential concerns affecting share performance would likely center on engagement trends compared to competitors in short and medium-form content landscapes.
The firm views Netflix as a "sustained double-digit revenue compounder" with consistent room for operating margin expansion in coming years, making only modest adjustments to its forward operating estimates following the latest earnings report.
Goldman Sachs will continue monitoring potential user growth and monetization of Netflix’s advertising tier, which could positively impact current estimates if the company successfully scales this business segment. The company’s market capitalization now stands at $527.48 billion, reflecting its position as a dominant player in the entertainment industry.
In other recent news, Netflix reported its third-quarter 2025 earnings, showing mixed results. Revenues met expectations, but operating income was impacted by a $619 million tax dispute accrual in Brazil. Despite this, Netflix achieved a 17% year-over-year revenue growth, consistent with its second-quarter performance. Piper Sandler lowered its price target for Netflix to $1,400, maintaining an Overweight rating, while JPMorgan adjusted its price target to $1,275, citing solid overall results but a lack of significant upside. UBS maintained a Buy rating with a $1,495 price target, highlighting the company’s operating income growth of 33% excluding the Brazilian tax charge. Raymond James reiterated its Market Perform rating, noting revenue slightly below expectations due to foreign exchange movements. Oppenheimer continues to rate Netflix as Outperform, maintaining a $1,425 price target, emphasizing the company’s profitability beat and positive fourth-quarter free cash flow guidance. These developments reflect varied analyst perspectives on Netflix’s financial performance and future prospects.
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