• Analysts grow cautious regarding Netflix, Inc NFLX over brewing competition in the post-Covid world.
  • Needham analyst Laura Martin saw Netflix as unlikely to win the Streaming Wars pending launch of a lower-priced ad-driven tier, adding Sports and News content, bundling with other products, and acquiring an extensive film and TV content library. 
  • Every major streaming competitor does one or more of the above, putting Netflix at a competitive disadvantage.
  • Laura believes that streaming is rapidly becoming a linear TV bundle substitute. 
  • Every content genre, deep libraries, and a free ad-driven tier can be crucial in reducing churn.
  • Goldman Sachs analyst Eric Sheridan downgraded Netflix to Sell from Neutral with a price target of $186, down from $265.
  • Sheridan reserved concerns around the impact of a consumer recession and heightened levels of competition on demand trends, margin expansion, and levels of content spending. 
  • He views Netflix as a “show-me story with a light catalyst path in the next 6-12 months.” 
  • Sheridan cut 2022 and 20023 revenue estimates to incorporate a greater probability of a weaker macro environment.
  • Price Action: NFLX shares traded lower by 4.54% at $183.99 on the last check Friday.
  • Photo by Tumisu via Pixabay

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