Netflix's (NFLX) "solid" H2 pipeline as well as a normalization in viewership post recent events will support user acquisition, engagement going forward, UBS said in a Thursday note.
UBS said that a channels-like app store, live TV channels and a FAST service are all on the table for the company to enhance value for subscribers and drive monetization by leverage the approximate 330 million subscriber base.
Netflix still expects ad revenue of $3 billion in 2026 and has suggested that the gap between ad tier average revenue per member, or ARM, and standard ARM is narrowing, UBS said, adding that it expects about 5% ARM growth and about 22 million net paid subscribers adds in 2026, compared with 4% growth and 23.5 million adds in 2025.
Additionally, UBS lowered its estimates on Netflix by less than 1% and said it continues to view the company as "industry leader in streaming video with a competitive moat, monetization runway and sustainable double digit revenue and operating income growth."
UBS adjusted its price target to $115 from $130 and maintained its buy rating.
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