Wells Fargo Downgrades Netflix to Underweight, Cuts Price Target to $57

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โดย Investing.com·US·Read original
Summary · why it matters

Wells Fargo downgraded Netflix to Underweight from Equal Weight on Friday, warning that softening viewer engagement and a weaker content slate could pressure the streaming giant's margins and valuation. Analyst Steven Cahall cut his price target for the stock to $57, implying about 25% downside, and lowered his valuation multiple to 15 times forward earnings from 21 times. He said the January viewership report, due with fourth-quarter results, is the negative catalyst, noting viewing at 1.6 hours per subscriber a day in the first half, which he estimated was down 8% from 2023 after adjusting for a password-sharing crackdown and geographic mix. Hours from its top 100 original titles fell in the period, while its U.S. TV share slipped below 8%, and Cahall said Netflix appears to be broadening engagement toward gaming, documentaries, reality and video podcasts as it takes on YouTube, but risks missing the watercooler originals that drive member value. His base case is for second-half hours from top 100 originals to fall 21% year over year, with elevated churn risk into 2027, and he trimmed his 2027 and 2028 earnings estimates to $3.77 and $4.52 a share.

Impact on stocks 2

Communication Services▼ · 1 stocks
Netflix Inc
NFLX
▼ NegativeCapitalrelevance

Wells Fargo downgraded Netflix to Underweight and cut its price target to $57, trimming 2027/2028 earnings estimates on margin and valuation concerns.

Financials▲ · 1 stocks
Wells Fargo & Company
WFC
± MixedCapitalrelevance

Wells Fargo is the analyst issuing the downgrade and price-target cut on Netflix, but the news is not about Wells Fargo itself.

Off-coverage companies 1

YouTube, LLCPrivate± Mixed
relevance

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