Netflix, Inc. (NASDAQ:NFLX) shares slid Friday after Wells Fargo turned outright bearish on the streaming leader, cutting the stock to Underweight from Equal Weight and lowering its price target to $57 from $80.
The stock traded near $71.66 midday Friday, down roughly 4.8% and well below the prior close of $75.31, according to Benzinga Pro data. The move extends a rough stretch: shares sit close to the low end of a 52-week range of $65.08 to $124.86, with a market cap around $298 billion.
- NFLX stock is down. See the chart and price action here.
What Wells Fargo Said
Analyst Steven Cahall’s concern centers on how much time subscribers actually spend watching.
“Engagement trends look worrying to us,” Cahall said Friday in a note to clients, per CNBC. “If the opportunity is to recast NFLX into a broader content hub, the risk is missing the watercooler originals.”
Netflix has been pushing into gaming, documentaries, reality programming, live sports and video podcasts, widening the funnel as it competes with YouTube for attention.
Cahall’s worry is what gets lost along the way — the handful of breakout series that generate cultural conversation and give members a reason to keep paying.
“We see breakout hits as a must for the stock to work again,” Cahall wrote, per CNBC.
The new $57 target rests on a compressed multiple, roughly 15 times forward earnings versus 21 times previously. Cahall flagged the second-half and full-year viewership report due alongside fourth-quarter results in January as the negative catalyst, with churn risk building into 2027.
A Steady Walk Down
Friday’s call caps a year of retreat from the same analyst. Wells Fargo resumed coverage in March at Equal Weight with a $105 target, arguing competition would keep Netflix’ content investment elevated and the multiple capped.
The target came down again in July, to $80, after second-quarter results left growth questions unresolved. Netflix said viewing hours grew 2% in the first half while guiding to a 10% increase in content spending for 2026.
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The Setup From Here
Wells Fargo now stands nearly alone. Of 34 analysts covering Netflix, 27 carry Buy ratings, six sit at Hold and just one rates the stock a Sell, leaving the consensus at Buy, according to Benzinga data.
The average price target of $102 implies upside of 42.9% from current levels — roughly 79% above Cahall’s $57 mark.
Sell-side consensus still treats the selloff in NFLX stock as an overshoot on a maturing but dominant platform. Cahall’s model treats hours per subscriber as the leading indicator and reads it as breaking down.
Content spending near $20 billion this year gives the slate room to surprise, and Netflix has a long record of unexpected hits. Though, Wells Fargo’s bet is that volume alone will not substitute for one.
NFLX Stock Price Activity: Netflix stock was down 4.93% at $71.59 at the time of publication Friday, according to Benzinga Pro market data.
Photo: Elliott Cowand Jr / Shutterstock
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