Netflix (NASDAQ:NFLX) Shares Down 1.8% Following Analyst Downgrade

Key Points

• Netflix shares fell 1.8% to about $70.30 after Morgan Stanley cut its price target from $83 to $80, though it maintained an “overweight” rating.
• Analyst sentiment remains broadly positive, with Netflix holding a “Moderate Buy” consensus rating and an average price target of $94.70, despite several recent target reductions.
• Insiders sold approximately $13.1 million of stock over the past three months, while institutional ownership remains high at 80.93%.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report)'s stock price dropped 1.8% during trading on Friday after Morgan Stanley lowered their price target on the stock from $83.00 to $80.00. Morgan Stanley currently has an overweight rating on the stock. Netflix traded as low as $70.19 and last traded at $70.30. Approximately 28,971,918 shares were traded during trading, a decline of 32% from the average daily volume of 42,447,590 shares. The stock had previously closed at $71.57.

Several other research analysts also recently commented on NFLX. Barclays set a $70.00 price target on shares of Netflix and gave the company an "equal weight" rating in a report on Wednesday. Jefferies Financial Group lowered their price objective on Netflix from $110.00 to $90.00 and set a "buy" rating on the stock in a research report on Friday, July 17th. Rothschild & Co Redburn dropped their price objective on Netflix from $120.00 to $93.00 and set a "buy" rating for the company in a research note on Tuesday, July 21st. Evercore restated an "outperform" rating and set a $110.00 target price (up from $100.00) on shares of Netflix in a research report on Monday, September 14th. Finally, Loop Capital decreased their target price on Netflix from $115.00 to $95.00 and set a "buy" rating on the stock in a research note on Friday, July 24th. Four analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating, fifteen have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $94.70.

Insider Activity at Netflix

In other news, Director Richard N. Barton sold 720 shares of the stock in a transaction dated Thursday, September 10th. The stock was sold at an average price of $75.27, for a total transaction of $54,194.40. Following the transaction, the director directly owned 2,460 shares in the company, valued at approximately $185,164.20. This represents a 22.64% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore A. Sarandos sold 27,312 shares of the firm's stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $73.35, for a total value of $2,003,335.20. Following the transaction, the chief executive officer directly owned 178,954 shares in the company, valued at approximately $13,126,275.90. This represents a 13.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 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. Insiders sold a total of 179,045 shares of company stock worth $13,132,194 in the last three months. 1.24% of the stock is owned by insiders.

Netflix News Roundup

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix is reportedly considering cutting about 5% of its workforce, potentially around 800 employees. Although the layoffs are unconfirmed, investors may view them as a way to control operating expenses and support the company’s roughly 30% net margin. Netflix layoffs: company planning to cut 5% of workforce
• Positive Sentiment: Morgan Stanley maintained an “overweight” rating on Netflix despite reducing its price target from $83 to $80, implying analysts still see meaningful upside from current levels. Morgan Stanley lowers Netflix price target
• Neutral Sentiment: Netflix received a $2.8 billion termination fee after Paramount abandoned its Warner Bros. pursuit. The payment boosts reported cash flow, but it is a one-time item and does not demonstrate recurring streaming earnings or content-financing capacity. Netflix’s $2.8 Billion Windfall Complicates Its Cash-Flow Story
• Neutral Sentiment: The company plans to pay approximately $200 million for U.S. rights to the 2027 Women’s World Cup. The deal could provide valuable live-sports programming and attract viewers, but it also adds content spending and execution risk. Netflix is paying US$200 million for 2027 Women’s World Cup
• Negative Sentiment: The potential layoffs reinforce concerns that Netflix is responding to intensifying competition, including YouTube, rising content costs and weaker viewer engagement. Netflix has not confirmed the reported cuts, so the announcement remains a headline risk ahead of earnings. Netflix Layoffs Report
• Negative Sentiment: Criticism from Solana co-founder Anatoly Yakovenko of Netflix’s upcoming FTX drama adds a modest reputational risk, though the impact on the company’s financial outlook is likely limited. Netflix Stock Dips after FTX Series Criticism

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in the business. Riversedge Advisors LLC raised its position in Netflix by 13.4% in the 3rd quarter. Riversedge Advisors LLC now owns 3,809 shares of the Internet television network's stock worth $265,000 after purchasing an additional 450 shares during the period. Wedmont Private Capital boosted its position in Netflix by 9.3% during the third quarter. Wedmont Private Capital now owns 116,842 shares of the Internet television network's stock valued at $8,362,000 after buying an additional 9,979 shares during the period. Intelligence Driven Advisers LLC grew its stake in shares of Netflix by 4.7% during the third quarter. Intelligence Driven Advisers LLC now owns 8,609 shares of the Internet television network's stock valued at $599,000 after buying an additional 390 shares during the last quarter. BOS Asset Management LLC grew its stake in shares of Netflix by 51.5% during the third quarter. BOS Asset Management LLC now owns 7,801 shares of the Internet television network's stock valued at $543,000 after buying an additional 2,653 shares during the last quarter. Finally, Central Bank & Trust Co. increased its holdings in shares of Netflix by 1.7% in the third quarter. Central Bank & Trust Co. now owns 34,055 shares of the Internet television network's stock worth $2,370,000 after buying an additional 585 shares during the period. 80.93% of the stock is owned by hedge funds and other institutional investors.

Netflix Stock Performance

The company has a quick ratio of 1.14, a current ratio of 1.14 and a debt-to-equity ratio of 0.39. The company has a fifty day moving average price of $75.48 and a 200 day moving average price of $81.49. The stock has a market cap of $292.72 billion, a PE ratio of 22.13, a P/E/G ratio of 0.98 and a beta of 1.62.

Netflix (NASDAQ:NFLX - Get Free Report) last announced its quarterly earnings data on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, beating the consensus estimate of $0.79 by $0.01. The firm had revenue of $12.56 billion during the quarter, compared to the consensus estimate of $12.58 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%.The business's revenue was up 13.4% on a year-over-year basis. During the same quarter in the previous year, the company posted $0.72 earnings per share. Analysts expect that Netflix, Inc. will post 3.59 earnings per share for the current year.

Netflix Company Profile

Netflix, Inc NASDAQ: NFLX is a global entertainment company that operates a subscription-based streaming service. It offers a broad range of television series, films, documentaries, and other programming, including original productions developed under the Netflix brand and licensed content from third-party studios.

The company also provides advertising-supported viewing options in some markets and has expanded into related entertainment categories, including mobile and cloud-based games, live programming, and consumer products associated with selected titles.

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