Netflix (NFLX) is facing investor scrutiny after announcing its $82.7 billion acquisition of Warner Bros. Discovery (WBD) film and TV studios. Analyst Craig Huber at Huber Research has downgraded NFLX stock from Buy to Sell, stating the deal is “very risky.”
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Overall, the deal, which is subject to regulatory approval, has worried investors and Wall Street due to its hefty price tag, potential integration challenges, and regulatory risks. Meanwhile, Paramount (PSKY), which was also competing for Warner Bros., claims the sale process unfairly favored Netflix.
Why Huber Is Bearish on NFLX Stock
Following the deal announcement, Huber has lowered his price target on NFLX from $137.50 to $92, implying a potential downside of more than 8% from current levels.
He calls the $82.7 billion deal “very risky,” noting it represents a major shift in Netflix’s strategy that he believes is unnecessary. The acquisition is expected to take 12–18 months to close, and the analyst warns that Netflix’s stock may struggle during that period—and possibly even after—if the deal is completed at all.
Broadly, the deal is likely to face intense regulatory scrutiny. Approval isn’t guaranteed, as regulators may raise issues over market power and industry consolidation. The acquisition is already drawing pushback from several groups, including Paramount, theater owners’ associations, film producers, and members of Congress.
Bernstein Cuts Price Target on NFLX
Apart from Huber, Bernstein’s analyst Laurent Yoon also reduced his price target on NFLX from $139 to $125. Yoon noted that there are “uncertainties in the regulatory review process” and a “real possibility” the deal could fall apart. He also raised concerns about Netflix’s user engagement if the deal doesn’t go through, questioning what alternative strategy the company would pursue in that case.
Yoon still maintained his Buy rating, predicting almost 25% upside from the current level.
What Is the Target Price for NFLX Stock?
Turning to Wall Street, NFLX stock carries a Moderate Buy consensus rating based on 28 Buys, seven Holds, and two Sells assigned in the last three months. The average NFLX stock price target is $135.71, pointing to a 35.4% upside from the current price.
