JPMorgan Raises Netflix Target Price to $1,010

JPMorgan has increased the target price on Netflix Inc (NASDAQ:NFLX) to $1,010 from $850, citing strong subscriber growth, rising ad revenue, and upcoming price hikes.

Netflix has experienced rapid subscriber addition, with the Jake Paul vs. Mike Tyson boxing event achieving record viewership, attracting 60 million households and becoming the most-streamed global sporting event.

JPMorgan now anticipates that Netflix will add 10 million subscribers in the fourth quarter, up from a previous estimate of 9 million.

The advertising tier has played a significant role, contributing over 50% of sign-ups in available markets. Netflix forecasts further growth of ad-tier subscribers by 2025, bolstered by partnerships with The Trade Desk (NASDAQ:TTD) and Google (NASDAQ:GOOGL).

Currently, Netflix's ad-supported tier has over 70 million monthly active users, with an expectation to reach 55 million subscribers by the end of 2025. The company plans to launch its proprietary ad server globally in 2025, which JPMorgan believes will enhance monetization.

Additionally, Netflix is leveraging live events, with two NFL games scheduled on Christmas Day anticipated to further increase ad revenue.

Despite some foreign exchange challenges slightly impacting revenue estimates, JPMorgan projects a robust 15% revenue growth in 2025. Free cash flow is expected to jump 46% year-over-year in 2025 to $9.3 billion, with further growth reaching $11 billion in 2026.