Netflix (NFLX) Earnings Are About to Hit – Here’s What J.P. Morgan Expects

The Q1 earnings season has kicked into action, with one of the market’s big media names stepping up to report. Netflix (NASDAQ:NFLX) is set to deliver its Q1 results after the closing bell, putting the streaming giant back in focus as investors look for the next read on its performance.

Since hitting a low in late February, sentiment around Netflix has shifted meaningfully, with the stock climbing about 42%. The rebound has come alongside the company’s decision to walk away from its attempted acquisition of Warner Bros. Discovery, a move that appears to have reassured investors.

While J.P. Morgan analyst Doug Anmuth notes that sentiment around NFLX has indeed gotten better, his discussions indicate the Street remains fairly divided on this name. While there is acknowledgment of its “secular leadership,” along with its growth and margin trajectory and “relative insulation” from AI-related disruption, concerns persist around engagement trends, competitive pressures, advertising execution, and valuation. There is also ongoing debate over whether recent U.S. price increases are already largely reflected in the 2026 outlook or could provide additional upside.

Anmuth leans toward the more cautious interpretation. “We believe the former,” the 5-star analyst noted, pointing out that the initial outlook provided three months ago came in stronger than expected, particularly given the heightened scrutiny around the business.

Even with that backdrop, Anmuth remains firmly in the bullish camp. The analyst expects the company to emerge from its recent M&A efforts “re-focused and swinging.” Anmuth sees potential for the 2026 operating margin outlook to rise from 31.5% to 32%, reflecting the absence of deal-related expenses, while share repurchases could also step up, supported by the $2.8 billion termination fee and a recently more attractive share price.

“While we get pushback on our target 30x 2027E GAAP EPS multiple, we believe there is upside to both estimates and the multiple (currently 25x) w/a couple quarters of strong execution,” the analyst went on to say.

Numbers-wise, Anmuth forecasts Q1 revenue of $12.16 billion, up 15% year-over-year on an FX-neutral basis, in line with management’s $12.16 billion guide and just below consensus at $12.17 billion. Anmuth estimates operating income at $3.92 billion, compared to guidance of $3.91 billion and the Street’s forecast of $3.95 billion. The analyst thinks investors are looking for Q1 revenue in the range of $12.17 billion to $12.18 billion and operating income of at least $3.9 billion.

For Q2, Anmuth forecasts revenue of $12.65 billion, representing 12% year-over-year growth on an FX-neutral basis and slightly ahead of the $12.62 billion consensus estimate. Operating income is expected to reach $4.32 billion, or a 34.1% margin, vs. the Street at $4.33 billion. Taking into account less favorable FX dynamics, Anmuth believe investor expectations are for Q2 revenue of $12.57 billion to $12.62 billion and operating income in the range of $4.25 billion to $4.30 billion.

All told, NFLX remains one of Anmuth’s top 5 picks (along with GOOG/L, AMZN, SPOT, & DASH), with the analyst assigning the stock an Overweight (i.e., Buy) rating, backed by a $120 price target. Should that figure be reached, investors will be sitting on returns of 11% a year from now.

While Anmuth’s conversations suggest mixed sentiment, on the Street, the stock still claims a Strong Buy consensus rating, based on 30 Buys vs. 10 Holds. The average target clocks in at $115.31, implying the shares will gain 7% over the coming months. (See NFLX stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.