Huber Research double-downgrades Netflix (NFLX) to Sell, cuts price target to $70 from $85 ahead of Q3 earnings (Oct 13)
What happened
Huber Research analyst Craig Huber on Tuesday double-downgraded Netflix to Underweight (Sell) from Overweight (Buy) and slashed his price target to $70 from $85, ahead of Netflix's Q3 earnings report next week. In a note to clients, Huber cited several 'bad signs,' including press reports of a planned 5% headcount reduction at Netflix. He noted the last significant layoffs came in Q2 2022, when Netflix cut about 4% of staff after subscriber declines, and flagged fears that engagement on the platform is stalling. Huber also pointed to Netflix's mid-July decision to publish viewer engagement reports just once a year starting in Q1 2027, versus twice a year previously, and warned that competition from YouTube, Disney+, Amazon Prime and others means Netflix will have to keep increasing annual content spend. He added a further concern that Netflix might attempt a major acquisition after its failed bid for Warner Bros. Discovery about 10 months ago. Netflix shares rose a fraction to $70.88 in afternoon trading.
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Who’s affected
- Netflix (NFLX) — double downgrade to Sell, price target cut to $70; shares were roughly flat at ~$70.88 in afternoon trading
- Comcast (CMCSA) — Wolfe Research suggested Sunday that Netflix could make a play for NBCUniversal assets; speculative M&A read-through
- Disney (DIS), Alphabet/YouTube (GOOGL), Amazon (AMZN) — named by Huber as fierce competitors for streaming viewing time
Sources