-- Netflix (NFLX) is poised for "substantial growth" in global advertising, while its latest price increases are likely to provide a meaningful boost to profitability, Wedbush Securities said in a note Friday.
The investment firm said it expects resilience in the US, while European challenges to price increases may be an overhang. Survey results indicating consistent subscriber behavior also support revenue growth into 2026, the note added.
Netflix will likely see incremental gains from its ad business as it expands partnerships, improves targeting, leverages AI, and adds more live content. interactive ads this year and, over time, purchasing opportunities as Netflix uses its data to improve its performance marketing capabilities, according to Wedbush.
The brokerage said Netflix's advertising revenue could at least double to about $3 billion in 2026, with "significant opportunities remaining in 2027 and beyond."
Netflix also has an incremental $2.8 billion from a Warner Bros. Discovery (WBD) deal-breakup fee to spend on content and ad stack improvements.
Wedbush reiterated its outperform rating on Netflix and increased its price target to $118 from $115.
Price: $101.94, Change: $-0.16, Percent Change: -0.15%