Netflix (NFLX) shares climbed approximately 4.3% on Monday after Evercore ISI raised its price target on the streaming giant to $110 from $100, while reiterating an Outperform rating. The new target implies roughly 42% upside from the stock's previous close.
The brokerage's optimism stems from improving subscriber trends in the United States and Japan, as well as growth opportunities in live events, short-form content, and advertising. Evercore's latest surveys show Netflix's US penetration rate hit a multi-year high of 63%, while Japan reached a record 22%. Churn intentions also improved in both markets, though customer satisfaction remains a concern in the US.
Survey data supports bullish view
Evercore analyst Kutgun Maral noted that the findings from the firm's 58th quarterly US subscriber survey and its semi-annual Japan survey reinforce the view that Netflix retains strong subscriber engagement and pricing power. The brokerage extended its valuation framework to 2028, applying a 25x multiple to its 2028 earnings-per-share estimate.
In Japan, 45% of newly surveyed subscribers said they joined Netflix as part of the company's World Baseball Classic promotion. The percentage of users who had watched live events rose to 60% in September from 42% in March. Netflix Clips, the company's short-form video feed, also gained traction, with 46% of Japanese respondents and 38% of US respondents saying they had scrolled through the feature.
Live events, ads, and buybacks as growth levers
Evercore highlighted live programming as a potential driver of subscriber growth and engagement. The company's advertising-supported tier is also attracting new and returning subscribers. Netflix's broader strategy focuses on growing revenue and operating profit while managing content costs. Management targets an operating margin of 31.5% this year, up from 29.5% last year and 26.5% two years ago.
Content costs increased 11.5% in the first half of 2026, while total viewing hours rose 2% year over year. The company has expanded its live programming and added lower-cost content, including video podcasts. The advertising business is expected to generate approximately $3 billion this year, with further growth potential from increased ad-supported viewing and improvements to its ad tech.
Netflix also repurchased a record $4.7 billion of its shares in the second quarter. Its board authorized an additional $25 billion in buybacks, leaving $27.1 billion remaining under existing authorizations at the end of June. Evercore described Netflix as a sustainable 20% earnings-per-share growth company, though it expects the catalyst path to become more visible in 2027 rather than 2026.
In a separate note, Citi maintained a Buy rating and a $100 price target on Netflix. The stock traded at $80.74 in morning trading, up 4.32%. For context, other tech names have seen similar analyst-driven moves, such as Roblox's surge after price target hikes and Meta's jump on AI news.
This article is for informational purposes only and does not constitute financial advice.
