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Benchmark 'cautious' on Netflix into earnings, sees over 25% downside risk

Published 04/12/2023, 09:40 AM
Updated 04/12/2023, 09:49 AM
© Reuters.  Benchmark 'cautious' on Netflix (NFLX) into earnings, sees over 25% downside risk
NFLX
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By Senad Karaahmetovic

Benchmark analysts reiterated a Sell rating on Netflix (NASDAQ:NFLX) shares and expect they will underperform "many Nasdaq companies with purer tech vs. content attributes."

"We remain cautious on Netflix as advertising initiatives and the nettlesome password sharing crackdown, while likely ARM accretive, may largely work to offset some SVOD competitive pressure rather than reignite growth under current difficult conditions," the analysts said in a note.

The analysts' $250 per share price target implies a downside risk of around 26% relative to yesterday's closing price.

Harrigan's comments come as analysts weigh in on Netflix ahead of the company's earnings report. Piper Sandler analysts see a "mixed" setup in shares ahead of Q1 EPS. Similarly, Morgan Stanley analysts see "a balanced view of the upside and downside potential in shares at current prices."

JPMorgan, on the other hand, is seeing near-term risk to Q2 numbers.

"Our overall numbers for 2023 are largely unchanged and we continue to view the paid sharing rollout--in conjunction with advertising--as a major part of the near-term bull thesis to expand NFLX's SAM," JPM analysts said in a note earlier this week.

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