Goldman Sachs moved Netflix from Neutral to Buy and lifted its 12-month price target from $100 to $120 after the company abandoned its bid for Warner Bros. assets and collected a $2.8 billion termination fee, citing improved risk/reward from current levels.

Analysts forecast sustained low double-digit revenue growth over the next three to four years, underpinned by paid subscriber additions, recent U.S. price increases and a rapidly scaling advertising business projected to rise from $1.5 billion in 2025 to $4.5 billion by 2027 and $9.5 billion by 2030.

Goldman expects roughly 250 bps of annual GAAP operating margin expansion driven by moderating content spending and cost discipline, while management’s prior guidance of around $11 billion in free cash flow for 2026 may prove conservative now that acquisition initiatives are off the table.

Netflix has repurchased $21 billion of shares since 2023 and could target buybacks equal to 20–25% of its market cap over the next five years, trading at a PEG ratio near 1.1x versus its five-year average of 1.65x, signaling an entry point by historical standards.