BMO Keeps Bullish Netflix Call After Stock's Sharp Decline
Netflix shares have dropped 45% over the past year, and BMO kept an Outperform rating with a $125 target after the third-quarter report. Revenue growth slowed each quarter this year, and the company reduced its 2026 ad revenue forecast by about $300 million. The article also notes improved operating margin and $4.8 billion of buybacks, while the average analyst target stands at $91.
BMO analyst Brian Pitz trimmed his Netflix target to $125 from $135 on Oct. 20, before the quarterly update, and retained an Outperform rating. The company also announced its largest workforce reduction since 2022, named Peter Rice chief content officer, and saw film chief Dan Lin leave on Oct. 20.
The quarter showed a 34.6% operating margin versus 28.2% a year earlier, lower churn, and $4.8 billion of buybacks—its largest such quarter. Revenue growth eased from 17.6% in 2025’s fourth quarter to 11.8% in 2026’s third, with 11.5% expected next.
The split between BMO’s bullish view and the lower consensus target may shape how investors interpret Netflix’s slowing growth and ad setbacks. Employees could face further uncertainty after recent layoffs, while advertisers may weigh whether the ad platform’s delayed tools justify spending. Subscribers might see pricing or content changes as management balances margins and buybacks. Because Netflix remains widely held, its performance could influence broader sentiment toward large media and streaming stocks, though the story’s immediate effect is likely confined to investors and industry participants.