Netflix is facing slowing viewership, rising content costs, and growth concerns ahead of third-quarter earnings.
- Huber Research downgraded Netflix to Underweight with a $70 price target.
- KeyBanc cited currency pressures and slower profit margin growth but believes Netflix can address concerns through spending cuts.
- On Tuesday, Netflix said it will exclusively stream all 2030 FIFA World Cup matches in Spain and Andorra.
Netflix Inc. (NFLX) stock slipped overnight as fresh analyst concerns over content spending and slowing margin expansion weighed on sentiment ahead of earnings. Huber Research downgraded the stock to Underweight, while KeyBanc cut its price target, citing potential corrective action.
Netflix stock inched 0.09% overnight, heading into Wednesday.
Huber Research, KeyBanc Cautious On Netflix
Analyst Craig Huber of Huber Research lowered his rating on Netflix to ‘Underweight’ from ‘Overweight’ and set a $70 price target, signaling a more cautious view of the streaming giant.
KeyBanc lowered its price target for Netflix from $92 to $85 but kept its Overweight rating. The firm also slashed its sales and earnings forecasts for 2026 through 2028, citing currency pressures and slower profit growth as Netflix spends more on content.
However, KeyBanc believes investors may have already factored in concerns about falling viewer engagement and slower profit growth. The firm expects Netflix to adjust its content spending and control other costs to improve growth and earnings.
Last week, both Morgan Stanley and Barclays lowered their price targets on Netflix. Morgan Stanley expected new content and sports to boost viewership and support growth, while Barclays saw mergers, restructuring, and AI shaping investor sentiment ahead of earnings.
Netflix’s Slower Growth And Falling Shares Add Pressure
Last week, reports suggested Netflix is planning to cut about 5% of its global workforce, or around 800 employees. Slowing growth and weaker viewer engagement are adding to investor concerns. Netflix shares have dropped about 42% since its attempted acquisition of Warner Bros. Discovery (WBD), which ultimately went to Skydance.
The company is expanding into live events, gaming and podcasts while facing slower sales growth and weaker awards results. On Tuesday, Netflix said it will exclusively stream all matches of the 2030 FIFA World Cup in Spain and Andorra, including live coverage and pregame, halftime, and postgame shows. The tournament will run from June 8 to July 21, 2030, with Spain, Portugal and Morocco hosting the event. The tournament will mark 100 years since the first World Cup in 1930.
Investors will watch its Q3 earnings on Oct. 20 for updates on its performance and growth plans. According to Fiscal.ai data, analysts see $12.86 billion in revenue with earnings of $0.83 per share.
NFLX Stock: Retail View
On Stocktwits, retail sentiment around the stock declined to ‘bearish’ from ‘bullish’ the previous day.
A user said, “One of the worst investments and stocks out there..,keeps going lower as the entire market keeps going higher.”
Another user said, “This is headed lower after ER. No other reason why this is stagnating at these levels.”
NFLX stock has cratered over 24% year-to-date.
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