Goldman Sachs said Netflix recently raised its subscription prices and is poised for further price increases. The investment firm upgraded the streaming giant from neutral to buyout. He also raised his price target to $120 from $100, suggesting an upside of 21.6% from Thursday’s closing price. “NFLX is committed to a) continuing to lead the broader media industry in content acquisition and development, including the live entertainment, creator/user economy, and “We believe the company is focused on a strategic roadmap for capital allocation, including (increased allocations to content and games) and b) a range of significant, multi-year capital returns to shareholders (including approximately $2.8 billion received from PSKY),” it said in a note to clients. In March, Netflix announced its first subscription plan increase since January 2025. The increase comes as the company moves to strengthen its existing TV and movie offerings, as well as increase investment in live events, video podcasts and other novel content types. NFLX YTD Mountain NFLX Year-to-date But while that spending could hurt Netflix’s stock price in the short term, Goldman Sachs says there are several other signs that the stock could soon rise. For example, Netflix’s stock price is likely to rise as its buyback activity normalizes, the analyst said. The streaming giant announced in January that it would halt stock buybacks to fund its more than $40 billion bid to acquire Warner Bros. Discovery. However, Netflix signaled it intended to restart its buyback program after abandoning the acquisition in late February. In a recent note, the investment firm projects that Netflix could buy back up to about 20% to 25% of its current market capitalization over the next five years. “Now that Netflix has exited the agreement (with WBD being acquired by PSKY), we expect a return to more regular capital returns (through stock repurchases). Management has consistently emphasized stock repurchases as an effective use of excess capital, with cumulative repurchases of approximately $21 billion (or an average of approximately 90% of annual FCF) since 2023,” Sheridan wrote. The entertainment platform is also showing signs of improving revenue, with an increase in paid memberships and advertising revenue. These developments could fuel compound earnings growth of at least low double-digit percentages over the next three years or so, according to Goldman Sachs. Sheridan said in the note that Netflix appears likely to maintain strong operating leverage and strengthen its position over the next three years, in addition to achieving sustainable free cash flow transformation through “a combination of restrained cash content spending and overall operational discipline.” Netflix stock rose 5% in 2026, outperforming the broader market.
