Netflix Stock Climbs Premarket: Goldman Cites 3 Reasons For Upgrade After 6-Month Tumble

• Goldman Sachs raised its PT on NFLX to $120 from $100, implying a more than 26% upside from current levels.
• The upgrade comes after the termination of the merger deal with Warner Bros.
• Retail sentiment on Stocktwits has remained in the Neutral region for the last six months, with low message volume 

Shares of streaming giant Netflix rose more than 1.5% early premarket on Monday after Goldman Sachs raised its price target to $120 from $100, as Wall Street awaits the company’s first-quarter results later this month.

The upgrade from ‘Neutral’ to ‘Buy’ came after Netflix walked away from the merger deal with Warner Bros., earning about $2.8 billion in merger termination fees from Paramount and Skydance Corp. Analysts at Goldman now expect a positive revision cycle for Netflix, with the company returning to a “Standalone execution story”.

Three Factors Of Netflix’s Bull Case

The current bullish case for Netflix relies on three factors. First, Goldman expects low double-digit revenue growth over the next three to four years, driven by more paid subscriptions, higher subscription revenue per user, and a growing advertising business, according to the report. 

In the advertising business, Goldman expects it to grow to about $9.5 billion by 2030. Additionally, the streaming giant also increased its prices across three U.S. subscription tiers, which could add $3 billion in incremental revenue over 2026-2027.

Secondly, over the next three years, Goldman expects steady margin expansion driven by moderate growth in content spending and overall cost discipline.

Analysts also noted the conservative guidance of $11 billion in free cash flow in 2026, "particularly now that the company has walked away from its prior M&A initiatives."

Third, with the failed Warner Bros. merger now behind it, analysts expect the company to resume its share buyback program and estimate it will buy back about 20-25% of its current market cap over the next five years.

What Wall Street Thinks Of NFLX

According to Koyfin Data, 37 of 51 analysts recommend ‘Buy’ or ‘Strong Buy’, while 13 recommend ‘Hold’. The 12-month average target is $113.43, implying a premium of 14.97% over current levels. 

What Retail Investors Think About NFLX

Retail investors remain ‘Neutral’ amid ‘Low’ message volume, according to the Stocktwits retail sentiment data. Year to date, Netflix shares have gained more than 5% in the market.

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