Netflix stock keeps falling after ‘sell’ call from Wall Street’s most bearish analyst

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Shares of Netflix Inc. they extended their recent strong sell-off on Tuesday, after Benchmark analyst Matthew Harrigan went back down with the broadcast giant and set a new price target that was the lowest on Wall Street.

The actions of the NFLX,
it fell 1.8% in the morning trading and has now fallen 17.9% amid a four-day losing streak. The stock was trading just 0.1% above the May 11 five-year low of $ 166.37.

Harrigan said he returned to the sell rating, “true, having prematurely improved stocks to hold” on Jan. 21. He set a $ 157 share price target, which was the lowest of the 44 analysts surveyed by FactSet.

In the January 21 update, which followed the disappointing fourth-quarter results and outlook that led to a 21.8% drop in shares, the longtime bearer said the sale of shares was ” overcooking “.

It kept its rating on hold as shares plummeted 35.1% on April 20 after first-quarter results, in which Netflix said it lost subscribers for the first time in years, he said. which would offer a lower subscription level and repress the password. sharing.

FactSet, MarketWatch

On Tuesday’s downgrade, Harrigan said he was “skeptical of any sustained recovery in Netflix shares,” although other analysts called the valuation attractive after the fall in shares this year.

“Beyond the inflation-challenged and price-sensitive consumer, Netflix’s continued excess of negative press, related to the loss of members and even Prince Harry and Meghan, is a slow-growing albatross,” he said. write Harrigan in a note to customers.

His mention of Prince Harry and Meghan refers to reports that Netflix was upset because the couple failed to get photos with Queen Elizabeth II during the platinum jubilee, following Netflix’s approval of the docuseries at the couple’s home. In addition, Netflix had canceled the development of Meghan Markle’s “Pearl” animated series in May due to cost reductions.

“The market is now very tired of streaming ratings and Netflix shares could be pressured if member growth and operating profit margin stopped at the same time,” Harrigan wrote. “Restricting cash programming spending can be difficult in the mature but increasingly competitive U.S. market, although growth investments are needed in Asia and other markets.”

Harrigan is one of six of the 44 analysts surveyed by FactSet who have the equivalent of Netflix sales ratings. There are 12 analysts with the equivalent of purchase ratings and now 26 are Netflix neutral. The average stock price target is $ 297.54, an increase of 79% from current levels. Harrigan’s target price is 47% below the Wall Street average.

Set of facts

Meanwhile, Harrigan said Netflix’s disclosure Monday afternoon that Ken Barker would take on the role of chief accounting officer of CFO Spencer Neumann is likely “harmless.” Although Barker comes from video game developer Electronic Arts Inc., Harrigan does not believe that his appointment as PAO is attributable to Netflix’s gaming ambitions.

Shares of Netflix have fallen 72.4% this year, enough to become the biggest drop to date in the S&P 500 SPX index,
+ 0.13%
components. The S&P 500 is down 21.6% this year.

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