Netflix Rally Could Cool As Trade Relief Shifts Focus, JPMorgan Still Bullish

JPMorgan analyst Doug Anmuth maintained an Overweight rating on Netflix Inc NFLX with a price target of $1,150 on Monday.

Netflix shares are +30% above post-tariff lows, significantly outperforming the SPX +15%, driven by the streaming giant’s defensive subscription nature & streaming leadership against macro and tariff uncertainty, Anmuth noted.

The analyst said some of that may reverse shortly as trade relief shifts investors more to tariff-impacted names that have lagged in recent weeks.

Also Read: Netflix And Other Streaming Stocks Slide As Trump’s Proposed Tariffs On Foreign Films Sparks Concern

More fundamentally, heading into Netflix’s Upfronts this week, he expects the company to provide updated Ad Tier MAUs, announce further expansion of the Netflix Ads Suite across international markets, and highlight key Live/Sports content.

Anmuth remains bullish on Netflix’s growing Ad Tier scale and projected Ad Tier subscribers of 60 million+ by the end of 2025, which ties to 140 million+ MAUs, assuming ~2.3 times MAUs or subscribers.

Now that Netflix has reached sufficient scale, the company is shifting its focus more to monetization. The analyst projected advertising revenue (ex-subscription) of $3.0 billion in 2025, more than doubling from $1.4 billion in 2024. Beyond advertising, the 2025 content slate remains strong, with key second-quarter releases including “Nonnas,” “Sirens,” “Big Mouth” Season 8, “Fear Street: Prom Queen,” “Ginny & Georgia” Season 3, “Tires” Season 2, “FUBAR” Season 2, and “Squid Game” Season 3.

Potential tariff implementation on films produced outside the U.S. has been a growing topic, but the implementation remains unclear, and it is difficult to size the potential financial impact.

Anmuth noted that Netflix produces original content across 50+ countries globally, and 3P articles suggest that 50%+ of content is produced internationally. However, Netflix’s contributions to the U.S. are significant, with 9k+ full-time U.S. employees, 2.2 million square feet of corporate office space in the U.S., and 3.1 million square feet of studio space across 60 U.S. soundstages.

Anmuth remained positive on Netflix, and his bull thesis reflects healthy double-digit revenue growth in both fiscal 2025 and 2026, continued operating margin expansion while increasing investments in content, ads, and gaming, multi-year free cash flow ramp on improving profit and cash content discipline, with growing buybacks, the company’s strong streaming leadership position, the potential to become global TV as Netflix expands its ~308 million member base (700 million+ global audience) across the 750 million+ broadband HHs ex-Russia & China.

Anmuth projected average 2025 and 2026 growth of +13% for foreign-exchange-neutral revenue, +22% for operating income, +24% for GAAP EPS, and +30% for free cash flow, which the analyst noted supports Netflix’s premium valuation.

Price Action: NFLX stock is up 3.1% to $1,144.61 at last check Tuesday.

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