Overview
- Netflix, which received a Buy rating from Goldman Sachs on Monday, rose about 3% after the bank set a $120 12-month price target.
- Goldman said ad sales could grow from about $1.5 billion in 2025 to nearly $9.5 billion by 2030, and Netflix has said it expects to roughly double ad revenue in 2026.
- The firm projects roughly 2.5 percentage points of GAAP operating margin expansion each year for three years and said Netflix’s $11 billion 2026 free-cash-flow goal may be low.
- After dropping its Warner Bros. Discovery bid and receiving about $2.8 billion in a breakup fee, Goldman outlined a path for sizable buybacks, including a scenario where Netflix repurchases 20% to 25% of its market value over five years.
- Investors now look to the April 16 first-quarter report for signs on ad growth, revenue per user, and the timing of any buyback restart, following March U.S. price hikes of $1 to $2 per month.