Netflix Inc.'s (NASDAQ:NFLX) stock slump has intensified amid mounting investor concerns about media dealmaking, rising competition, and questions over the company's next phase of growth
JPMorgan analyst Doug Anmuth maintained a Neutral rating on Netflix and cut the price forecast from $127.50 to $124.00.
Anmuth noted Netflix stock has fallen 11% since third-quarter earnings, underperforming the S&P 500's 1% decline driven by concerns over media deal headlines, competition, and a broader rotation away from high-multiple techs.
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The analyst said that investors continue to press Netflix on its potential appetite for M&A, its early revenue outlook for 2026, and the trajectory of its fast-growing advertising business.
He reminded investors that Netflix historically builds rather than buys, having never completed a major acquisition.
Anmuth argued that any selective M&A must expand Netflix's opportunity set, strengthen its intellectual property, and accelerate execution—not distract the company or invite regulatory scrutiny. While consolidation among major studios could create licensing challenges, the analyst stressed that Netflix now owns most of its content, with originals representing roughly 63% of its library and no single title exceeding 1% of total viewing—making it resilient even if rivals merge.
He highlighted Netflix's accelerating advertising progress three years into the business. Netflix now counts 190 million monthly active ad viewers, a higher engagement threshold than the 170 million watcher metric cited in May.
Anmuth noted that Netflix has reached critical ad-tier scale, with thousands of advertisers, support from major demand-side platforms, and stronger measurement capabilities. Netflix expects ad revenue to more than double in 2025, and the analyst projected an additional 46% jump to $4.3 billion in 2026 as the platform shifts toward programmatic sales. Although the ad tier remains dilutive to average revenue per member, he expected improved monetization over time.
Anmuth forecasted steady operating discipline as Netflix issues its first formal 2026 revenue outlook in January. The analyst modelled normalized expense growth of about 10% in 2025 and 9% in 2026, supporting double-digit revenue gains. He expected Netflix to guide for 11%–13% revenue growth in 2026, similar to how it began 2025.
Anmuth estimated 2026 revenue of $50 billion, strong margin expansion, and free cash flow reaching $12.3 billion.
On engagement, the analyst noted Netflix continues to gain viewing share in the U.S. and key global markets. Recent hit releases and a heavier second-half slate are driving faster view-hour growth. He expected momentum to build in 2026, driven by major franchise releases and expanded live sports programming.
Despite the stock's recent pullback, Anmuth noted Netflix is positioned for durable growth, rising advertising scale, and expanding shareholder returns.
Anmuth projected fourth-quarter revenue of $11.96 billion and adjusted EPS of $0.54.
NFLX Price Action: Netflix shares were up 2.10% at $112.60 at the time of publication on Tuesday, according to Benzinga Pro data.
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