Tariffs? What tariffs?
With all the sound and financial fury surrounding President Donald Trump’s tariff agenda, you might it hard to believe that anyone could possibly escape the unholy hullabaloo.
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Stocks were falling at last check over tariff worries and Trump’s targeting of Federal Reserve Chairman Jerome Powell.
Meanwhile, China warned it would hit back at countries that make deals with the US that hurt Beijing’s interests, as the trade war between the world’s two biggest economies heats up.
Even penguins and seals couldn’t escape Trump’s Liberation Day dragnet, which seems to change hourly, so how could any person, place or company sidestep the landslide of levies?
Enter Netflix (NFLX) , the streaming service that — so far — seems to be avoiding the trade war terrors.
Greg Peters, co-CEO of Netflix, says low-cost ad plans give company more resilience. Photo: Akio Kon/Bloomberg via Getty Images
Netflix co-CEO: Company ‘quite resilient’ in tough times
The company reckons it has an audience of more than 700 million people, with more than two-thirds of them living outside the U.S. It declared in its first-quarter shareholder letter that “no entertainment company has ever programmed for so many tastes, cultures and languages.”
Netflix recently beat Wall Street’s earnings expectations and Co-CEO Greg Peters discussed the current economic environment during the company’s earnings call.
“We’re paying close attention, clearly, to the consumer sentiment and where the broader economy is moving,” he said. “But based on what we are seeing by actually operating the business right now, there’s nothing really significant to note. Primary metrics and indicators would be our retention, that’s stable and strong.”
Peters added that Netflix’s most recent price changes have been in line with expectations, while engagement remains strong and healthy.
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“Stepping back, we also take some comfort in the fact that entertainment historically has been pretty resilient in tougher economic times,” he said.
“Netflix specifically also has been generally quite resilient, and we haven’t seen any major impacts during those tougher times, albeit, of course, over a much shorter history.”
In late January, the company increased pricing across the board, raising its standard plan to $17.99 a month, its ad-supported plan to $7.99, and its premium plan to $24.99.
“Having the low-cost ads plan in our largest markets also gives us more resilience, and we think that we represent an incredible entertainment value starting at $7.99 in the U.S. and Canada, with that as planned,” Peters said.
“It’s an accessible price point, and we really do expect the demand for entertainment to remain strong,” he added.
Analyst: tariffs no direct impact on Netflix
Wedbush analyst Alicia Reese gave the company high praise, saying in a research note that Netflix “has established a virtually insurmountable lead in the streaming wars.”
“Netflix is positioned to accelerate ad tier revenue contribution for the next several years by adding live events, improving its advertising solutions and targeting, and broadening its content strategy,” Reese said.
The analyst reiterated her outperform rating for Netflix and boosted her price target to $1,200 from $1,150.
“We expect Netflix to continue to edge out the competition in content spending, thereby improving content volume and quality and cementing its lead in streaming,” she continued.
“Here, the company’s huge advantage is its subscriber base, as it can justify investment in content that appeals to ‘only’ 10% of its audience, which now totals over 300 million households.”
While massive subscriber growth was the primary driver in 2024, Reese said she expected price increases to drive revenue growth in 2025 and the ad tier to drive revenue higher in 2026.
Other investment firms addressed Netflix’s seeming resistance to macroeconomic conditions.
Related: Analyst reboots Netflix price target ahead of earnings
Needham analyst Laura Martin kept a buy rating with a $1,126 price target on Netflix, saying the company saw no “meaningful changes” in subscriber retention, churn, or a plan mix due to a slowing economy or tariffs, according to The Fly.
Martin said Netflix’s global scale should maximize its revenue and content investment, while its bundling with other services should lower its churn rate.
She added that the company’s advertising should accelerate revenue growth and expand its margins.
JP Morgan analyst Doug Anmuth raised the firm’s price target on Netflix to $1,150 from $1,025 and kept an overweight rating on the shares.
The company’s Q1 earnings and outlook were solid, the analyst tells investors in a research note. The analyst said Netflix “continues to play offense in its business, while the stock remains defensive in the uncertain environment.”
Netflix does not see direct tariff impact, Anmuth added.
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