Netflix Stock Gains on Goldman Upgrade and Price Hikes

Netflix stock rose after a Goldman Sachs upgrade on April 6, 2026, as analysts cited late-March price hikes, accelerating advertising revenue, and cash from a merger termination fee that could support resumed buybacks ahead of the April 16 earnings report.

Goldman Upgrade and Stock Reaction

Goldman Sachs upgraded Netflix to Buy and raised its 12-month price target to $120, citing improved risk-reward, tighter content discipline, and advertising momentum. Analyst Eric Sheridan highlighted these factors as the basis for the more positive rating. Shares rose about 1.5% in premarket trading and opened roughly 3.2% higher, trading near $100 by midday.

Pricing, Advertising, and Buybacks

Analysts project Netflix’s first-quarter 2026 revenue at $12.16 billion and earnings per share at $0.76. In the fourth quarter of 2025, Netflix reported $12.05 billion in revenue, a 17.6% year-over-year increase, with a 48.5% gross margin and EPS of $0.56, slightly above consensus. The company’s outlook implies an operating margin near 31.5% and full-year 2026 revenue between $50.7 billion and $51.7 billion, reflecting 12–14% growth.

In late March, Netflix raised U.S. subscription prices across tiers: the Standard ad-free plan increased to $19.99 per month, Premium to $26.99, and the ad-supported Standard to $8.99. Analysts estimate these hikes will add about $1.7 billion in revenue and roughly 300 basis points to North American growth in fiscal 2026.

The advertising business is expected to double to about $3 billion in 2026 and expand toward $9.5 billion by 2030 as adoption of the ad-supported tier and advertiser demand grow. Netflix’s annual content budget is around $20 billion, which includes experiments with live sports and event programming as part of broader growth initiatives.

Netflix received $2.8 billion from a canceled merger, providing a balance-sheet cushion that analysts say makes a resumed share buyback program plausible. Estimates suggest buybacks could total about 20–25% of current market value over five years. Goldman highlights conservative free-cash-flow guidance near $11 billion for 2026 as supporting capacity for capital returns.

Analyst coverage remains skewed toward buys, with 37 of 51 analysts rating the stock Buy or Strong Buy. The 12-month average price target stands near $113, reflecting confidence that higher prices, faster ad monetization, and potential buybacks could support margin expansion and a valuation re-rating if execution continues.