Netflix shares fell nearly 12% on Friday morning after the company's quarterly results prompted Wall Street analysts to lower price targets, with the stock paring losses to about 7% by afternoon. The selloff followed Netflix's Thursday earnings report showing second-quarter earnings per share of $0.80 against a $0.79 estimate, while revenue of $12.56 billion missed the $12.58 billion consensus. Analysts cited concerns around slowing engagement, decelerating revenue growth, content spending returns, and the company's ability to sustain its growth trajectory as reasons for the downgrades.
Wall Street Firms Lower Netflix Price Targets Following Earnings Miss
Wolfe Research described the quarter as a "murky mosaic" and lowered its price target to $84 from $107 while maintaining an 'Outperform' rating, according to CNBC. The revised target implies nearly 13% upside from Netflix's Thursday closing price.
Bank of America cut its price target to $105 from $125 while maintaining a 'Buy' rating, implying an upside of 41% from the last close. The firm said the second-quarter results were "not strong enough to fundamentally alter the debate" around slowing engagement, decelerating revenue growth, and potential mergers and acquisitions, according to TheFly.
JPMorgan cut its price target to $85 from $118 while maintaining an 'Overweight' rating, implying 14% upside from the last close. The firm said the post-earnings selloff reflected concerns around engagement, monetization and returns on content spending.
Citi maintained its 'Buy' rating and $100 price target, implying about 34% upside. The firm said a weaker third-quarter outlook, unchanged full-year guidance, reduced engagement disclosures, and the buyback size could keep pressure on the stock despite steady engagement growth.
Wells Fargo lowered its price target to $80 from $105 while maintaining an 'Equal Weight' rating, implying about 7% upside from Thursday's close. The firm described Netflix as "a maturing story" and said stronger content-led engagement will be needed to support the stock's valuation.
Bernstein lowered its price target to $95 from $100 while maintaining an 'Outperform' rating, with the revised target implying nearly 28% upside. The firm said the recent selloff does not fully reflect Netflix's medium- to long-term potential.
Morgan Stanley lowered its price target to $83 from $90 while maintaining an 'Overweight' rating, implying nearly 12% upside from the stock's last close. The firm said engagement concerns are overblown, but the latest results are unlikely to settle the growth debate.
Goldman Sachs lowered its price target to $94 from $110 while maintaining a 'Buy' rating, implying about 26% upside from Thursday's close. The firm said first-half engagement met expectations, but the latest results did little to end Wall Street's debate over engagement and Netflix's long-term growth strategy.
Netflix narrowed its full-year 2026 revenue forecast to $51 billion to $51.4 billion, compared with its previous outlook of $50.7 billion to $51.7 billion. Analysts expect revenue of $51.38 billion.
Stocktwits Retail Traders Show Bullish Sentiment Despite Selloff
Stocktwits retail sentiment on NFLX was 'extremely bullish,' while message volume was 'extremely high' at the time of writing. In a Stocktwits poll asking whether traders were buying the dip after Netflix's post-earnings selloff, 32% of nearly 2,200 respondents said they were buying now. While 21% said they were waiting for a lower entry, 40% said they were staying away.
NFLX shares are down nearly 27% year-to-date.
FAQ
What caused Netflix stocks to fall on Friday?
Netflix stocks fell nearly 12% on Friday morning after the company reported second-quarter earnings per share of $0.80 and revenue of $12.56 billion, missing the $12.58 billion consensus estimate. Wall Street analysts lowered price targets citing concerns around slowing engagement, decelerating revenue growth, and content spending returns.
How did Wall Street analysts respond to Netflix's earnings report?
Eight major Wall Street firms lowered their price targets on Netflix following the earnings report. Wolfe Research cut its target to $84 from $107, Bank of America reduced its target to $105 from $125, JPMorgan lowered its target to $85 from $118, and Goldman Sachs cut its target to $94 from $110, among others. Most firms maintained 'Buy' or 'Overweight' ratings despite the downgrades.
What is Netflix's revised revenue guidance for 2026?
Netflix narrowed its full-year 2026 revenue forecast to $51 billion to $51.4 billion, compared with its previous outlook of $50.7 billion to $51.7 billion. Analysts expect revenue of $51.38 billion.
