In a report released today, Jeffrey Wlodarczak from Pivotal Research downgraded Netflix to a Hold, with a price target of $105.00.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Jeffrey Wlodarczak has given his Hold rating due to a combination of factors surrounding Netflix’s recent strategic moves. The company’s decision to acquire WBD Studios/Streaming Assets for $83 billion is seen as a costly endeavor, introducing significant risks such as regulatory approval challenges and potential bidding wars that could further inflate the price. This acquisition reflects Netflix’s concern over the increasing competition from short-form content platforms like TikTok and YouTube Shorts, which are capturing more consumer attention, especially among younger audiences.
Wlodarczak’s analysis suggests that while the acquisition could strengthen Netflix’s position in long-form premium content, it comes at a high cost and indicates management’s apprehension about stagnating subscriber engagement. Consequently, he has adopted a more conservative outlook on Netflix’s long-term subscriber and average revenue per user (ARPU) forecasts, leading to a substantial reduction in the target price. Given the lack of significant upside potential in the stock price, Wlodarczak has downgraded Netflix’s stock to a Hold rating.
In another report released on December 5, Barclays also maintained a Hold rating on the stock with a $110.00 price target.
Based on the recent corporate insider activity of 172 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NFLX in relation to earlier this year.