Netflix Inc: Continued Double-Digit Revenue Growth & 20%+ Profit Growth, Though Engagement Concerns Persist; Remain Overweight w/$85 PT

Research evidence excerpt

Netflix Inc: Continued Double-Digit Revenue Growth & 20%+ Profit Growth, Though Engagement Concerns Persist; Remain Overweight w/$85 PT

J P M O R G A N North America Equity Research

17 July 2026

Netflix Inc

Continued Double-Digit Revenue Growth & 20%+ Profit Overweight

Growth, Though Engagement Concerns Persist; NFLX, NFLX US

Remain Overweight w/$85 PT Price (16 Jul 26):$74.35

▼Price Target (Dec-27):$85.00

Prior (Dec-26):$118.00

NFLX shares traded down ~9% post-close on concerns around engagement,

monetization, & returns on content spending. Engagement growth of +2% was Internet - Large Cap / Mid & Small

Capessentially in-line with our previewed investor expectation of +2-3%, but there are

questions on subscriber growth, especially as Netflix shifts the engagement report Doug Anmuth AC

to annual, tests free trials, and more broadly evolves its pricing & plan strategy. (1-212) 622-6571

douglas.anmuth@jpmorgan.com

However, NFLX reiterated that not all viewing hours are created equal as it

optimizes across quality, variety, & quantity, and that it is not a linear relationship Bryan M. Smilek

(1-212) 622-8886

between view hours and revenue/profit. Beyond engagement, NFLX tightened its bryan.smilek@jpmorgan.com

2026 Revenue outlook to +12% FXN (+13-14% reported) & maintained its 31.5%

Daniel Pfeiffer

2026 OI margin outlook. While we understand the concerns, we believe revenue (1-212) 622-0161

& profit growth are ultimately most important, & NFLX is not managing for daniel.pfeiffer@jpmchase.com

engagement hours. We continue to believe NFLX has healthy multi-year growth J.P. Morgan Securities LLC

headroom as it accounts for ~5% of TV view share globally and has penetrated

<45% of its broadband household TAM. Our 2026/2027 estimates come down ~1-