Netflix Inc. shares came under heavy selling pressure on Friday after Wells Fargo downgraded the streaming giant, flagging concerns over weakening viewer engagement and a less compelling pipeline of content in the second half of 2026.
Netflix shares fell as much as around 7% during the session, extending a difficult run for the stock. The shares were trading at about $71.32, down 5.29%, at 9:42 a.m. ET on September 18, according to the market data provided.
In the early minutes of trade, the scrip hit a low of $70.11, which was nearly 7% lower as compared to the previous day's close.
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Wells Fargo analyst Steven Cahall cut Netflix to Underweight from Equal Weight and sharply reduced the firm's price target to $57 from $80. The new target represents a substantially more cautious view of the stock's prospects.
The downgrade centres on concerns that Netflix is struggling to generate the kind of breakout programming that can sustain viewer engagement. Cahall estimates that overall viewership could decline 4% year-on-year in the second half of 2026. He also expects viewing hours for Netflix's Top 100 original titles to fall by more than 20%.
Wells Fargo's analysis comes as Netflix faces the challenge of maintaining its momentum in an increasingly competitive streaming market. The company has built its growth story around a steady flow of successful original series and films, but the brokerage believes the upcoming content slate may not deliver the same level of engagement.
The concern is particularly significant because Netflix needs a regular pipeline of breakout titles to keep viewers engaged and justify its valuation. The analyst also pointed to a decline in Netflix's US television share, which has fallen below 8% based on Nielsen data.
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Wells Fargo has also reduced its earnings estimates for Netflix for 2027 and 2028, while lowering its operating-margin forecasts. Cahall's $57 price target is based on a lower valuation multiple of 15 times estimated 2027 earnings, compared with 21 times previously.
However, Wells Fargo's bearish stance is not universally shared on Wall Street. Evercore ISI recently maintained its bullish view on Netflix and raised its price target to $110 from $100, highlighting the divergence in analyst expectations around the streaming company's growth prospects.
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