Bank of America Has Lowered Expectations for Netflix (NASDAQ:NFLX) Stock Price

Key Points

• Bank of America lowered Netflix’s price target from $105 to $90 but maintained a “buy” rating, implying about 31% upside from the stock’s prior close. Analysts overall rate Netflix a “Moderate Buy,” with an average target of $91.85.
• Netflix’s latest quarterly results exceeded expectations, with EPS of $0.87 versus $0.82 forecast and revenue of $12.87 billion, up 11.9% year over year.
• Netflix shares opened at $68.69, near the lower end of their 52-week range, while institutional investors increased their holdings and now collectively own about 80.93% of the company.

Netflix (NASDAQ:NFLX - Get Free Report) had its target price dropped by Bank of America from $105.00 to $90.00 in a research report issued on Wednesday, Benzinga reports. The firm currently has a "buy" rating on the Internet television network's stock. Bank of America's price objective indicates a potential upside of 31.02% from the company's previous close.

NFLX has been the subject of several other research reports. TD Cowen reiterated a "buy" rating and issued a $100.00 price target on shares of Netflix in a research report on Monday, October 5th. DZ Bank reissued a "buy" rating on shares of Netflix in a research report on Monday, July 20th. Needham & Company LLC lowered shares of Netflix from a "buy" rating to a "hold" rating in a research note on Wednesday. Barclays set a $65.00 price objective on shares of Netflix in a research note on Wednesday. Finally, BMO Capital Markets reaffirmed an "outperform" rating and issued a $125.00 target price (down from $135.00) on shares of Netflix in a report on Friday. Three analysts have rated the stock with a Strong Buy rating, thirty-three have given a Buy rating, seventeen have issued a Hold rating and three have assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average price target of $91.85.

Netflix Trading Down 1.7%

NFLX opened at $68.69 on Wednesday. The company has a quick ratio of 1.14, a current ratio of 1.14 and a debt-to-equity ratio of 0.39. Netflix has a 52 week low of $65.08 and a 52 week high of $124.86. The business's 50 day moving average is $74.92 and its two-hundred day moving average is $80.20. The firm has a market cap of $286.02 billion, a price-to-earnings ratio of 21.62, a price-to-earnings-growth ratio of 0.99 and a beta of 1.62.

Netflix (NASDAQ:NFLX - Get Free Report) last posted its quarterly earnings data on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share for the quarter, beating the consensus estimate of $0.82 by $0.05. The business had revenue of $12.87 billion during the quarter, compared to the consensus estimate of $12.87 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%. The company's revenue was up 11.9% compared to the same quarter last year. During the same period in the prior year, the company earned $0.59 earnings per share. On average, research analysts predict that Netflix will post 3.59 EPS for the current year.

Insider Buying and Selling

In other news, insider David Hyman sold 5,723 shares of Netflix stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $72.85, for a total value of $416,920.55. Following the sale, the insider owned 316,100 shares of the company's stock, valued at $23,027,885. The trade was a 1.78% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Theodore Sarandos sold 27,312 shares of the business's stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $73.35, for a total transaction of $2,003,335.20. Following the transaction, the chief executive officer owned 178,954 shares in the company, valued at approximately $13,126,275.90. This trade represents a 13.24% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 179,045 shares of company stock worth $13,132,194. 1.24% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Netflix

Institutional investors have recently added to or reduced their stakes in the business. Atticus Wealth Management LLC boosted its position in shares of Netflix by 8.1% during the 3rd quarter. Atticus Wealth Management LLC now owns 9,561 shares of the Internet television network's stock worth $665,000 after purchasing an additional 720 shares in the last quarter. Bell Bank grew its stake in shares of Netflix by 30.8% during the 3rd quarter. Bell Bank now owns 28,800 shares of the Internet television network's stock worth $2,004,000 after purchasing an additional 6,777 shares during the period. Parkside Investments LLC increased its holdings in shares of Netflix by 21.7% in the 3rd quarter. Parkside Investments LLC now owns 18,250 shares of the Internet television network's stock valued at $1,270,000 after purchasing an additional 3,250 shares in the last quarter. Physician Wealth Advisors Inc. increased its holdings in shares of Netflix by 23.8% in the 3rd quarter. Physician Wealth Advisors Inc. now owns 3,775 shares of the Internet television network's stock valued at $263,000 after purchasing an additional 726 shares in the last quarter. Finally, Pinnacle Associates Ltd. increased its holdings in shares of Netflix by 35.7% in the 3rd quarter. Pinnacle Associates Ltd. now owns 190,170 shares of the Internet television network's stock valued at $13,232,000 after purchasing an additional 50,014 shares in the last quarter. Hedge funds and other institutional investors own 80.93% of the company's stock.

Trending Headlines about Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Q3 results exceeded profit expectations: Netflix reported $0.87 in diluted EPS versus roughly $0.82 expected. Revenue rose 12% year over year to $12.87 billion, while net income increased 44% to approximately $3.66 billion and operating margin reached 34.6%. Netflix Q3 earnings results
• Positive Sentiment: Management remains confident in long-term revenue growth: CFO Spencer Neumann said Netflix could deliver double-digit revenue growth into 2027 through pricing, advertising and a broad content slate, even if viewing-hour growth remains modest. Netflix CFO revenue growth outlook
• Positive Sentiment: Content and engagement initiatives are planned: Netflix is targeting stronger U.S. execution and expects upcoming films, series and live programming—including projects involving Brad Pitt, Narnia and NFL games—to improve viewing and membership trends. Netflix content and engagement strategy

About Netflix

Netflix, Inc NASDAQ: NFLX is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.

The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.

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