Are Analysts Finally Turning on Netflix?

Netflix Inc. (NASDAQ: NFLX) shares dipped on Wednesday after an unfavorable analyst report came out against the online streaming giant. This really has not been Netflix’s year, with shares down 23% year to date, and most of that drop coming over the past quarter.

So what’s changed for Netflix in the past three months? In the big picture, nothing really has changed at Netflix, but it’s the competition that analysts are worried about. Within the past quarter, Apple Inc. (NASDAQ: AAPL) and Walt Disney Co. (NYSE: DIS) have thrown their hats in the ring and are preparing online streaming platforms of their own.

While Netflix is the king of content right now, Disney could pose a real threat with its library of cartoons and movies, not to mention its incredibly popular marvel franchises. On the other hand, it’s hard to discount Apple from anything with its expansive ecosystem, Apple TV and over $200 billion in the bank that could easily be shifted to content creation. The kicker here is that Apple and Disney’s prices are looking to undercut Netflix.

Monness Crespi Hardt analyst Brian White has reiterated a Buy rating for Netflix but cut $100 off the price target, lowering it to $340. He noted that, in light of the weakening macro environment since Netflix last provided guidance, combined with more details last month from Apple around its planned launch of Apple TV+ and incremental data points around increasingly fierce competition for content, there was no choice but to cut the target.

Evercore ISI analyst Vijay Jayant cut his Netflix price target too, to $300 from $380, on Monday, citing concerns about coming competition from providers including Disney.

A few other analysts have come out with new targets on Netflix this week as well:

  • UBS Group reiterated a Neutral rating and lowered its price target to $265 from $330.
  • Rosenblatt Securities also reiterated it as Neutral and cut its target to $265 from $330.
  • Aegis reiterated a Hold rating and cut its price target from $310 to $275.

Shares of Netflix traded down about 2% to $265.24 Wednesday morning, in a 52-week range of $231.23 to $385.99. The consensus price target is $377.66.