Netflix’s expanding advertising business and ability to raise prices could fuel additional revenue growth, CFRA Research said. The research firm upgraded the streaming giant to buy from hold. Analyst Kenneth Leon raised his 12-month target price by $22 to $115, which implies upside of 16%. “A s the industry leader, we see NFLX driving member growth, [average revenue per user] expansion with pricing power, and advertising contribute to incremental revenue growth in 2026, perhaps $1.5B to $3.0B,” Leon wrote. “The shift to higher revenue per user optimization aligns with broader industry trends.” NFLX YTD mountain NFLX YTD chart The analyst pointed out that rising advertising revenue balances out slower subscription growth. Another catalyst comes this year as Netflix seeks higher penetration in developed markets outside of North America and Europe, such as Japan. For the U.S. and Canadian markets, Leon believes that mid-teens revenue growth this year is the goal. While most of the company’s production, programming content and capital investment remains in the U.S., the company is clearly successful at identifying other countries where success can be seen. “This is an important signal that NFLX can grow the franchise both in developed markets that command higher monthly subscriber rates (2x or more rates in developing markets) and continue to expand its market presence in other countries around the world,” the analyst said. Netflix also has pricing power in the fast-changing video streaming market, Leon added. He pointed out that the company is successfully expanding its content universe by introducing video podcasts, live events and partnering with social media creators. Leon views generative artificial intelligence as a catalyst as well. “Management sees itself as uniquely positioned at the intersection of entertainment and technology to leverage AI. Opportunities include providing creators with AI-infused tools to enhance storytelling, improving the product experience through greater personalization and interactivity, and accelerating the effectiveness of its advertising business,” he said. Shares of Netflix have added 6% this year and are up 9% over the past 12 months.
