Topline
Shares of streaming giant Netflix started the week down more than 6% after another Wall Street analyst turned more cautious — adding to this year’s There have been severe losses so far on the company’s business outlook, with warnings that the stock could struggle for the rest of the year.
Another Wall Street analyst recently Turned bearish on the stock and warned of further losses.
KEY FACTS
Despite rebounding in recent weeks, Netflix stock was one of the worst performers in the S&P 500 on Monday, down more than 6% to It was just under $226 per share.
Research director Kenneth Leon said that since mid-July After gaining more than 40% since its lows, Netflix stock could “underperform” the rest of the market by the end of 2022, according to CFRA Research.
In a recent report to clients, he will The stock’s recommendation rating was downgraded from “hold” to “sell” and the price target was lowered by $7 to $238 per share, just below Friday’s closing price.
“Netflix’s key catalyst — the launch of a new ad-paid subscription plan — may not be seen until 2023,” Leon noted, though he added that this could help Return to flat to lower user growth so far this year.
CFRA analysts forecast that while Netflix had lower operating and free cash flow in the most recent quarter, these metrics should improve, despite ongoing challenges for the business including “Inflation and less discretionary consumer spending”.
The stock has fallen more than 60% this year, and analysts have The days have been increasingly bearish for months as the company’s subscriber growth slowed and it faced increasing competition from rival streaming services.
Surprising fact
According to FactSet , of nearly 50 Wall Street analysts covering Netflix stock, less than a third still have a “buy” rating on the stock — less than half of what it was nearly a year ago. Just over the past six months In terms of Netflix stock ownership and trading activity, hedge funds have been net buyers of the stock, even though most other groups have been selling. Investment advisers and private wealth managers have been net sellers, with mutual funds in particular selling off stocks the fastest, according to FactSet data.
Key Background
Netflix, one of the 2020 pandemic stock darlings, is up nearly 70 percent for the year as stay-at-home measures boost growth %. Things will be different in 2022 as investors pull out, but Netflix remains one of the top performers in the S&P 500 as the market rebounds from its June 16 lows. Shares of the streaming giant have risen about 30% since then, compared to the benchmark index’s nearly 15% gain. However, Netflix stock has started falling again in recent sessions as the recent market rally has begun to fade. Stocks fell broadly on Monday, with tech stocks falling, as worries about a Fed rate hike intensified and Wall Street analysts warned that the recent bear market rally was “coming to a halt”.
Further reading
Ford, Tesla and Netflix are among the best performers in this summer’s massive rally (Forbes)
Dow falls 600 points as experts warn bear market rally is ‘stopping’ ( Forbes )
Bank of America warns of ‘textbook’ bear market rally, forecasts new stock market lows (
Forbes)
Tech stocks lead the market higher again, but analysts are divided on whether the rally will continue ( Forbes
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