JPMorgan cuts Netflix target to $85 from $118 after Q2 miss

JPMorgan cut its price target on Netflix to $85 from $118, a 28% reduction, after the streaming giant's Q2 results and guidance disappointed.

"Netflix's Q3 guidance fell short across revenue, earnings and operating margin, challenging the premium valuation," the JPMorgan analyst wrote in a note to clients.

The new target implies about 14% upside from Netflix's $74.35 close Thursday, though shares fell 9.8% in after-hours trading to $67.07. The previous $118 target had implied roughly 60% upside. Netflix reported Q2 revenue of $12.56 billion, narrowly missing the $12.58 billion consensus, while EPS of $0.80 edged past the $0.79 estimate. The company guided Q3 revenue to $12.86 billion and EPS to $0.82, both below Wall Street forecasts of $13.01 billion and $0.84, respectively.

The downgrade adds to mounting pressure on Netflix, whose stock has fallen 21% year to date and 41% over the past 12 months. The company's advertising business — expected to double to about $3 billion in 2026 — and a new $25 billion buyback authorization provide potential catalysts, though the softer forward guidance has shifted focus to whether the current valuation can be sustained.

The cut by JPMorgan, one of the Street's most influential voices on the stock, could trigger a wave of target revisions from other sell-side firms. Investors will watch for further analyst moves and Netflix's Q3 earnings in October for signs of a growth reacceleration.

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