U.S. investment bank JPMorgan Chase ( Jefferies ) has adjusted its coverage arrangement for Netflix ( Netflix ) stock research, with analyst John Colantuoni taking over as the lead researcher. The ‘Buy’ rating is maintained, with a target price of $85. Based on the current stock price of $70.57, there is potential for a rise of about 20.4%. JPMorgan Chase expects that improved member monetization capabilities, scale effects driving profit margin expansion, and continued share repurchases will support Netflix’s average annual earnings growth of over 14% over the next decade.
Price increases and growth in advertising business are expected to drive an average annual revenue growth of 11% over the next three years.
Jefri expects that from 2026 to 2029, Netflix's revenue will grow at an average annual rate of about 11%, with more than half of the increase coming from growth in per-subscriber revenue. The bank predicts that in the next three years, Netflix's average revenue per subscriber will grow at an annual rate of about 6%, mainly due to increases in subscription prices and advertising revenue.
Jefries pointed out that, based on the cost per hour of viewing in the US market, Netflix's standard subscription package is currently about 60% lower than that of other paid streaming platforms. As Netflix is expected to raise prices by about 7% annually, this gap may narrow to 50% by 2029.
In terms of advertising business, JPMorgan Chase expects Netflix's advertising revenue to grow at a rate of 35% per year, driven mainly by the expansion of its membership base, an increase in the number of ad impressions, growing demand from third-party advertising procurement platforms, and the introduction of new forms of advertising.
The third-quarter financial report is about to be released, with the market focusing on profit margins and content investment.
Netflix plans to release its third-quarter financial report on October 20th. Other investment banks remain cautious about the speed of Netflix's profit margin expansion.
StoneX It is expected that the company's revenue for this quarter will reach $12.86 billion, a year-on-year increase of 11.8%; operating profit will be approximately $4.29 billion, with an operating profit margin of 33.3%, which is slightly higher than the market's general expectations.
KeyBanc has recently lowered its target price for Netflix to $85, but maintained a "overweight" rating, mainly due to unfavorable exchange rate factors and the potential that increased content investment may limit profit margin improvements.
Yorkville Ives gave a rating of 'in line with the market' for the first coverage of Netflix, with a target price of $75; StoneX maintained a 'hold' rating before the release of the financial report.
In terms of business, Netflix recently acquired the broadcasting rights for the 2030 World Cup in Spain and Andorra, further expanding its coverage of sports events.
Regarding the upcoming financial reports, the market will focus on whether Netflix can continue to increase per-member revenue through subscription price hikes and growth in its advertising business, as well as whether new content investments will affect the expansion of profit margins.
