J.P. Morgan has assigned streaming giant Netflix (NFLX) an investment rating of “overweight” following a period of restriction.
Analysts at the research firm believe the company remains a healthy organic growth story, driven by a combination of strong content, global subscriber growth, continued pricing power, and an early-stage/under-monetized ad tier.
They think the company’s ad-supported tier should further expand its subscriber base while driving high-margin incremental revenue.
“NFLX’s ad revenue grew more than 150% in 2025 & is expected to double to ~$3B in 2026, and we believe the business has continued momentum led by improvements in targeting & measurement,” the research firm said in its March 2 note.
They also expect continued strong FCF generation and anticipate elevated share buybacks in 2026, driven by the $2.8B termination fee from Warner Bros. (WBD) and a currently opportunistic share price.
For Netflix, AI should drive improved content discovery and personalization and better advertising solutions and measurement, which would ultimately reduce content production costs, JPM said.
“We believe storytelling and talent will remain critical moats, ultimately better insulating NFLX from AI disruption risk compared to transactional business models,” JPM said Monday.
NFLX has a price target of $120, implying an upside of nearly 42%.