Netflix shares fell 4.6% after Wells Fargo downgraded the stock to underweight, citing deteriorating viewer engagement and a lack of hit content compared to rivals like Disney.
Wells Fargo downgraded Netflix to underweight and cut its price target from $80 to $57 citing deteriorating viewer engagement and a lack of breakout hits.
Disney is mentioned as a comparative benchmark for being more hit-driven than Netflix, implying relative strength but no direct action taken on the stock.
Wells Fargo downgraded Netflix to underweight, citing a 8% decline in daily viewer engagement and a lack of breakout original series. Analyst Steven Cahall warned that the company's pivot toward games and live TV has diluted its core content offering, leading to a 4.6% drop in share price.
The downgrade stems from concerns over declining viewer engagement and a lack of breakout original series, which the firm views as essential for the company's growth.
Analysts suggest Disney currently maintains a more hit-driven streaming strategy, which provides a stronger foundation for subscriber value than Netflix's current model.