Street View: Netflix's tax charge not a deterrent to analyst optimism

** Netflix NFLX missed Wall Street's third-quarter earnings estimates due to an unexpected charge of $619 mln tied to a Brazilian tax dispute, while its full-year forecast topped analyst expectations marginally

** Shares down 6.6% to $1,158.37 in premarket trading

AD MAGIC TRUMPS TAX NOISE

** J.P.Morgan ("neutral," PT: $1275) says, the tax expense, while creating some noise in the quarter, is not a material concern and will remain a modest recurring cost

** "We believe the bigger focus on numbers is the lack of revenue upside in the back-half"

** Morgan Stanley ("overweight," PT: $1500) noted that results were broadly in line when excluding the catch-up tax payment, with underlying margins outperforming expectations

** Jefferies ("buy," PT: $1500) expects new ad formats to roll out in 2026, supported by GenAI adoption, and sees advertising as the greatest upside driver for next year's growth

** Canaccord Genuity ("buy," PT: $1525) expects ad revenue to more than double in 2025, supported by programmatic infrastructure and new AI-powered ad formats

** Sees post-earnings dip as a buying opportunity, citing strong ad growth and margin expansion despite the Brazil tax hit