Citi has returned to coverage of Netflix Inc. (NFLX) with a Buy recommendation and a target price of $115, implying potential share appreciation in a range of about 5% to 17% from current levels. The brokerage identifies three core reasons it believes the stock could outperform over the coming year.
Three catalysts
Analyst Jason Bazinet summarized the thesis succinctly: "We like Netflix for three reasons." Citi's research outlines those three areas as: potential to increase FY26 EBIT guidance, an expected price rise in the U.S., and the likelihood of larger share repurchases.
Citi projects that Netflix's operating margins in 2026 will come in roughly 40 basis points higher than consensus estimates, which the bank attributes to a more favourable cost outlook. The firm also expects Netflix to raise prices in the United States, a move Citi says could help drive incremental revenue growth.
The third pillar of Citi's bullish case is the company's capital deployment path. With no large acquisitions anticipated, Citi contends that management may have greater scope to return cash to shareholders through buybacks. The bank adds that Netflix's cash generation profile supports elevated shareholder distributions in the years ahead.
Model changes and outlook
Following the release of 4Q25 results, Citi updated its financial model to reflect higher revenue assumptions and improved operating margins, and this contributed to the resumption of coverage at the Buy rating and the $115 target.
Risks cited
Citi cautions that long-term advertising revenue is a notable risk to its thesis. While consensus forecasts anticipate roughly $11 billion in ad sales by 2030, Citi's view is more conservative, placing potential ad revenue nearer $9 billion by that year. The bank further projects annual advertising revenue growth of about $1.5 billion beginning in 2027, versus roughly $2 billion per year implied by consensus.
Despite that headwind, Citi's updated model, which incorporates the most recent quarterly results and the revised margin and revenue assumptions, leaves the bank constructive on the shares.
Context limitations
Some language in the research reflects timing that may appear inconsistent within the available commentary - for example, the expectation for a U.S. price increase is referenced both as a specific 4Q26 event and as happening "later this year." The firm’s guidance and timing assumptions remain those stated in its published research.
Investors should note that projections and targets reflect Citi's internal analysis and are subject to revision as new company results and market conditions emerge.