Netflix Inc (NASDAQ:NFLX, XETRA:NFC) is positioned for continued growth in both subscription revenue and advertising, according to Wedbush, which has raised its price target on Netflix to $118 from $115 while maintaining an ‘Outperform’ rating.
The analysts believe the company is entering a period of stronger monetization supported by recent price increases, steady subscriber trends, and a rapidly scaling advertising business.
Their revised price target is based on an unchanged 25x P/E multiple applied to updated 2028 earnings estimates, and implies upside from current levels of about $102.
The analysts expect Netflix to be “positioning for substantial growth in global advertising,” and that ad revenue should at least double to $3 billion in 2026, highlighting the firm’s view that advertising is becoming a central growth engine for the company.
They also noted that recent price increases could support profitability, while warning of regional variation in response.
“European resistance to price increases could be an overhang this year as Netflix works through legal challenges,” the analysts wrote, pointing to potential pressure in international markets even as domestic demand remains resilient.
Wedbush’s survey work suggests stable consumer behaviour despite earlier price hikes, with roughly 60% of respondents showing consistent engagement levels. The analysts believe that this “bodes well for the upcoming price increases across premium and ad tiers domestically,” indicating potential upside to average revenue per member beginning in 2026.
The ad-supported tier is described as increasingly sticky, though still less stable than premium subscriptions. Wedbush added that Netflix’s low churn is significant for advertisers, driven by content depth and engagement, while advertising growth is expected to accelerate as the company improves targeting and expands formats.
For the near term, Wedbush expects Q1 revenue of $12.22 billion versus consensus of $12.18 billion and guidance of $12.157 billion, alongside EPS of $0.77. The analysts said their survey indicates consistency quarter-over-quarter topline growth, and points to upside in both Q1 and 2026 expectations.
Looking further ahead, Wedbush expects global subscriber growth of around 5% in 2026 following an estimated 8% increase in 2025 to more than 325 million users.
It also projects revenue of $50.7 billion to $51.7 billion in 2026, representing 12% to 14% growth, with advertising contributing around three percentage points. The company is expected to generate about $11 billion in free cash flow and maintain an operating margin of 31.5%.
The analysts also highlighted an incremental $2.8 billion from a Warner Bros. break-up fee, which they expect to be directed toward content investment and improvements in Netflix’s ad technology stack. They said this would help “extend its competitive lead” in global streaming and advertising.
“Should Netflix overcome European challenges to its subscription price increases, we could see further upside in its share price this year,” the analysts concluded.