Deutsche Bank sees a buying opportunity in Netflix Inc. (NASDAQ:NFLX) after a rough September. The bank argues that the streamer’s global production footprint gives it an edge rivals can’t easily match.
Analyst Bryan Kraft upgraded Netflix to Buy from Hold, CNBC reported, and set its price target to $95 from $100. The new target still implies about 37% upside from Monday’s close.
Netflix shares rose 1.5% to $70.25, per Benzinga Pro market data, in early trading Tuesday.
- NFLX stock is climbing. See the real-time price action here.
A Rough Month for Netflix Stock
The upgrade follows heavy selling. Netflix is down more than 14% in September. It’s on pace for its worst month since June, when shares fell 17%. The stock has also lost more than 26% so far this year, which puts it on track for its steepest annual decline since 2022.
Engagement has been the main worry. Wells Fargo cut Netflix to Underweight earlier this month and flagged troubling user-engagement trends.
But Kraft argues that the market is missing the bigger picture.
The International Edge
Deutsche Bank’s case rests on content made outside the U.S.
“Netflix has an established competitive advantage and substantial lead over competitors in international production, which is evident in Netflix’s well-diversified geographic content production mix,” Kraft said.
“We believe this advantage will allow Netflix to sustain its global leadership position. More than 60% of production is now outside of the US,” he added.
Kraft also sees room for Netflix to widen its role.
He said the company “has the brand strength, global scale in subscribers/revenue, and organizational expertise to continue to broaden its position as a platform (Netflix As A Platform, NAAP), rather than limiting itself to a vertically integrated entertainment producer and programmer.”
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Street Still Leans Bullish
Most of Wall Street remains positive despite the slide. Of 33 analysts tracked by Benzinga, 26 rate Netflix a Buy. Six rate it a Hold, and one rates it a Sell. The consensus rating is Buy.
The average price target is $100, about 42% above current levels. Kraft’s $95 target sits below the average, so Deutsche Bank is more cautious than the Street even after its upgrade.
What Traders Are Watching
The bulls are betting on international scale. The bears are focused on engagement. Netflix’s next quarterly report on Oct. 20 could show which argument the numbers support.
NFLX Stock Price Activity: Netflix stock was up 2.15% to $70.72 at the time of publication on Tuesday, according to Benzinga Pro.
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