‘An Attractive Entry Point’: Morgan Stanley Raises Netflix (NFLX) Price Target Ahead of Earnings

Netflix (NFLX) stock is gaining attention ahead of its upcoming earnings after Morgan Stanley analyst Sean Diffley maintained an Overweight rating on the stock and raised the price target from $110 to $115 per share. The new price target indicates 16% upside from current levels. The analyst believes concerns around engagement growth and margins have eased, making the current setup more attractive.

Netflix is set to report its Q1 2026 results on April 16. Wall Street expects earnings per share (EPS) of $0.76 for Q1 2026, reflecting 15% year-over-year growth. Revenue is estimated to rise 15.5% to $12.17 billion.

Morgan Stanley Chimes In on Netflix Stock

Diffley noted that Netflix is currently trading at about 25–26x FY27 earnings, below its five-year average of around 30x, suggesting the stock is not expensive relative to its growth. The firm expects Netflix to deliver steady double-digit revenue growth, with earnings and free cash flow growing at around 20% annually.

While investments may slow margin expansion in the near term, Morgan Stanley still sees a path to roughly 40% EBIT margins by 2030, supported by pricing power and operating leverage. The analyst also expects revenue growth to pick up in the second half of 2026, helped by U.S. price increases, with ARPU (average revenue per user) gains likely starting from the third quarter.

Morgan Stanley added that Netflix stock has historically performed well after U.S. price hikes, with average gains of about 20% over the following nine months. The firm believes the stock remains attractive relative to its growth, with its valuation still below that of many large tech peers.

Is NFLX Stock a Buy, Sell, or Hold? 

Heading into Q1 results, Wall Street has a Strong Buy consensus rating on Netflix stock based on 31 Buys and nine Holds. The average NFLX stock price target of $115.25 indicates 16% upside potential. NFLX stock has risen 6% year-to-date.