Netflix could generate $2.7B in ad revenue just from U.S., Canada, by 2026: J.P. Morgan
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Netflix (NASDAQ:NFLX) is slated to launch its advertising-supported tier in the next few months and J.P. Morgan said the new offering could help the streaming giant generate as much as $2.7B in revenue just from the U.S. and Canada over the next few years.
Analyst Doug Anmuth, who has a neutral rating and $240 price target on Netflix (NFLX), noted it's possible that Netflix (NFLX) has 7.5M advertising-supported subscribers by the end of next year, an incremental boost of 5%, generating some $600M in revenue. But by 2026, that number could surge to 22M subscribers, accounting for a 19% incremental boost to Netflix's (NFLX) subscriber count in the region, generating $2.65B in sales.
"The [U.S., Canada] ad-supported tier could generate overall revenue of $1.15B in 2023 and $4.6B in 2026, including incremental revenue of $350M in 2023 and $2.3B in 2026, which would drive 2% upside to our current 2023 estimates and 13% upside to 2026," Anmuth wrote in a note to clients. 
Netflix (NFLX) shares were down fractionally to $224.25 in premarket trading.
The analyst added that revenue and profit remain "critical" for Netflix and more is expected to be learned when Netflix (NFLX) reports third-quarter results next week.
Last month, Evercore upgraded Netflix (NFLX) to outperform after conducting some surveys and performing analysis of the company's advertising opportunity.