Analysts Raise Targets as nflx stock Dips 2.5% Despite Strong Earnings Outlook

Netflix's second-quarter results have prompted multiple analysts to raise their stock price targets, yet the stock reacted with restraint, reflecting investor focus on the company's future performance. The streaming powerhouse surpassed some critical expectations for the period and enhanced its full-year 2025 financial outlook. However, hopes for greater quarterly outperformance and stronger forecasts led to a subdued market response. Netflix shares, which had ended the preceding trading session up by 1.9%, experienced a 2.5% decline by early morning on Friday.

Wall Street's attention is now turning to Netflix's performance in the latter half of the year. Analysts consider the debut of new content and growth in the advertising tier as key areas influencing the company's trajectory.

Bernstein analyst Laurent Yoon maintained his "buy" rating and $1,390 price target, noting impressive revenue figures but acknowledging unmet elevated expectations. Despite raising its full-year guidance, Netflix experienced an after-hours trading dip, inducing analysts to reassess projections for the remainder of the year and beyond.

William Blair analyst Ralph Schackart retained his "outperform" rating, highlighting high expectations for Netflix shares, which have appreciated 42% year-to-date. According to Schackart, despite posting a "good" set of outcomes, the results fell short of lofty anticipations. He remains optimistic, citing the company's solid retention, consistent engagement levels, and planned price adjustments in line with expectations.

Following the quarterly results, several analysts increased Netflix's stock price targets. MoffettNathanson analyst Robert Fishman increased his target by $100 to $1,400, driven by Netflix's robust content calendar and ad tier growth. He emphasized revenue growth reaching the top end of new guidance, which should support accelerated earnings growth despite anticipated content amortization.

Evercore ISI analyst Mark Mahaney underscored strong fundamentals with accelerated revenue growth, a record high operating margin, and favorable foreign exchange impacts. He highlighted stable or accelerating trends across regions, suggesting conservative margin guidance and engagement growth prospects tied to content slate success and advertising revenue boosts.

Guggenheim Securities analyst Michael Morris raised his target by $50 to $1,450 while projecting stronger engagement growth in the coming months. He highlighted the TF1 agreement in France as a potential model for future deals, underscoring Netflix's industry-leading content distribution.

BMO Capital Markets analyst Brian Pitz foresees healthy member growth and advertising ramp bolstered by an appealing content slate. He noted local content investments across diverse markets, supporting Netflix's engagement and growth trajectory.

TD Cowen analyst John Blackledge raised his target slightly, anticipating second-half engagement growth driven by significant content releases like the "Wednesday" series and the "Stranger Things" finale. Blackledge highlighted Netflix's ad revenue doubling ambitions for 2025 following solid upfront outcomes.

CFRA Research analyst Kenneth Leon reiterated a "strong buy" rating with a target of $1,485, pointing to Netflix's pricing power and advertising strategy as factors enhancing its competitive edge. He praised the company's ad tech platform for capturing more sponsorship deals and its local content approach broadly delivering successful results.

Pivotal Research Group's Jeffrey Wlodarczak remained the most bullish, retaining a $1,600 target. He asserted Netflix's underpenetration globally combined with an appealing value proposition would continue to fuel subscriber growth. Wlodarczak emphasized Netflix's premier status in premium streaming content.

Outside Wall Street, industry experts pointed to Netflix's strong content strategy and price adjustments as drivers for sustained revenue growth. However, advertising remains a strategic aim requiring refinement. Analysts suggest Netflix's data insights offer considerable value for advertisers, given its engagement metrics.

Overall, while Netflix’s latest earnings have generated a slew of analyst upgrades, the tempered stock movement signals that investors are awaiting clearer signs of success as the company moves into the second half of the year with a slate of anticipated content releases.