Investing.com -- JPMorgan raised target price on Netflix Inc (NASDAQ:NFLX) to $1,010 from $850, on strong subscriber growth, increasing ad revenue, and price hikes.
Netflix has added subscribers at an accelerating pace, with the Jake Paul vs. Mike Tyson boxing event driving record viewership. The event attracted 60 million households, becoming the most-streamed global sporting event.
JPMorgan now expects Netflix to add 10 million subscribers in the fourth quarter, up from a previous estimate of 9 million.
The advertising tier has also contributed significantly, accounting for over 50% of sign-ups in markets where it is available. Netflix expects ad-tier subscriber growth to scale further in 2025, supported by partnerships with companies like The Trade Desk (NASDAQ:TTD) and Google (NASDAQ:GOOGL).
Netflix's ad-supported tier currently has more than 70 million monthly active users, with projected growth to 55 million subscribers by the end of 2025. The company is rolling out its proprietary ad server globally in 2025, which JPMorgan believes will enhance monetization.
The platform is also capitalizing on live events. Its two NFL games on Christmas Day are expected to further boost ad revenue.
While foreign exchange pressures have slightly reduced revenue estimates, JPMorgan projects strong revenue growth of 15% in 2025. Free cash flow is expected to rise by 46% year-over-year in 2025 to $9.3 billion, with further growth to $11 billion in 2026.