-- Netflix (NFLX) may outperform its own guidance for the full year as the impact of earlier-than-expected price increases takes hold, UBS Securities said in a note emailed Thursday.
Last month, the company increased prices across its US plans, including raising its ad-supported standard tier to $8.99 per month from $7.99. The price of its standard plan without ads rose by $2 to $19.99 a month, while the premium tier now costs $26.99, compared with $24.99 previously.
These price increases offer upside potential for 2026 estimates, UBS analysts including John Hodulik wrote.
UBS projects currency neutral revenue growth of 14% with a 32.6% margin rate for 2026, compared with guidance that called for a 11% to 13% revenue increase and a 31.5% margin.
BofA Securities previously said that Netflix's most recent round of price increases highlighted the streaming giant's pricing power.
The company is likely to roll out more hikes in other major markets that are expected to boost average revenue per member, according to the UBS note.
The widening price gap between plans with and without ads, along with new demand-side platform relations with companies including Amazon (AMZN), will likely double Netflix's ad-supported revenue in 2026, Hodulik said.
"While Netflix continues to slowly grow share of total TV viewing in the US, its share of streaming viewership remains under pressure given growth in (free ad-supported television)," Hodulik added.
In February, Netflix dropped its plans to acquire Warner Bros. Discovery (WBD), which will now be acquired by Paramount Skydance (PSKY).
"With the Warner Bros bid behind it, we believe Netflix is still positioned to benefit from its solid slate of content this year including the return of four of its top 20 series, new films such as War Machine and The Rip, a growing list of live events and the ramp in video games," Hodulik said.
Shares of Netflix were up 2.5% in recent trading on Thursday.
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