Netflix, Inc (NFLX.O): Addressing Key Debates Ahead of Q226 Results

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Netflix, Inc (NFLX.O): Addressing Key Debates Ahead of Q226 Results

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08 Jul 2026 20:00:00 ET │ 19 pages

Netflix, Inc (NFLX.O)

Addressing Key Debates Ahead of 2Q26 Results

CITI'S TAKE

Sentiment on Netflix remains subdued for four reasons: 1) tepid

engagement, 2) fears of M&A, 3) lack of catalysts, and 4) enthusiasm for

semis, which has put pressure on Netflix. We remain more upbeat. We find Buy

the valuation compelling, believe M&A could be positive, and see new tiers Price (08 Jul 26 16:00) US$75.59

as a potential positive catalyst. We maintain our Buy rating.

Target price US$100.00↓

Drivers of Recent Weakness — We believe four factors have put pressure on from US$115.00

Netflix’s share price: 1) tepid viewership, 2) an M&A overhang, 3) perception that Expected share price return 32.3%

Netflix lacks catalysts, and 4) investor enthusiasm for semis, which puts pressure on Expected dividend yield 0.0%hyper-scalers and, in turn, pressures Netflix.

Expected total return 32.3%

We Are More Upbeat — We remain more upbeat: 1) In May, management hinted they Market Cap US$318,294Mmay introduce new tiers. This may allow Netflix to segment more effectively, helping

top-line growth and reigniting investor interest. 2) We believe M&A has scope to help

fortify Netflix’s IP, which should help engagement and improve operating leverage.

2Q26 Expectations — Our forecast suggests Netflix will report 2Q26 results in line Price Performance

with guidance (revenue of ~$12.57 billion, operating income of ~$4.11 billion, and (RIC: NFLX.O, BB: NFLX US)

EPS of $0.78). However, we’d note, given recent appreciation of the USD, FX may

depress reported revenue by up to ~1%.

3Q26 Outlook — Our forecast suggests NFLX will provide 3Q26 guidance relatively