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Paramount Today
By the People, for the People
Netflix Stock Upgraded by JPMorgan After Exiting Warner Deal
Analysts see strong organic growth ahead for the streaming giant.
Published on Mar. 2, 2026
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JPMorgan has upgraded Netflix (NFLX) stock to Overweight and set a $120 price target after the company decided not to pursue the acquisition of Warner Bros assets. Analysts expect Netflix to focus on organic growth, with projected operating margins reaching 32% by 2026 and strong revenue and earnings expansion.
Why it matters
Netflix's decision to exit the Warner Bros bidding war was welcomed by investors, as it signals the company's disciplined approach to mergers and acquisitions. With the focus now on organic growth, analysts see continued subscriber gains, pricing power, and growth in the company's advertising-supported tier as key drivers of future performance.
The details
JPMorgan expects Netflix's operating margins to reach around 32% in 2026, with revenue and earnings projected to grow at a compound annual rate of 12% and 21%, respectively, from 2025 to 2028. The firm also forecasts free cash flow growth of roughly 22% annually, reaching $11 billion in 2026. The $2.8 billion termination fee from the abandoned Warner deal could support increased share buybacks.
- In the first half of 2025, Netflix's viewing hours rose about 1%.
- In the second half of 2025, Netflix's viewing hours grew around 2%.
- Netflix's original content viewing grew approximately 9% in the second half of 2025.
- Netflix's ad revenue grew more than 150% in 2025 and is expected to approach $3 billion in 2026.
The players
Netflix, Inc.
A leading global streaming entertainment service that offers a wide variety of TV shows, movies, and other content.
JPMorgan
A multinational investment bank and financial services company that provides a range of financial services, including investment banking, asset management, and commercial banking.
Warner Bros
A major American entertainment company that produces film, television, and music content.
Paramount
An American media conglomerate that operates the Paramount Pictures film studio and Paramount+ streaming service.
What’s next
JPMorgan expects Netflix to potentially increase share repurchases during 2026, supported by the $2.8 billion termination fee from the abandoned Warner deal.
The takeaway
Netflix's decision to focus on organic growth and disciplined M&A has been well-received by investors, as the company looks to capitalize on continued subscriber gains, pricing power, and growth in its advertising-supported tier to drive strong financial performance in the coming years.
