Streaming giant Netflix (NASDAQ:NFLX) shocked its users when it said it was launching a crackdown on password-sharing, which had long kept friends and enemies close to those who paid subscriptions. However, Wolfe Research and Rosenblatt analysts believe little has changed since Netflix began its crackdown. On Friday, Wolfe announced it had changed its bullish stance on Netflix and downgraded the company to Peer Perform from an initial Outperform. It also raised concerns about Netflix’s 2024 growth forecast amid slowing subscription rates and tightening competition.
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Wolfe analyst Peter Supino noted its disappointment in the password-sharing crackdown. According to the analyst, the crackdown had not raised revenue, unlike what was previously estimated. Scupino continued that if the company’s growth fails to see upside, then it would be hard to justify Netflix’s 50% P/E premium to the S&P.
While noting equal disappointment, Rosenblatt analyst kept their Neutral rating on Netflix and a $400 price target. The firm said its survey suggests Netflix’s crackdown on password sharing should have been higher. In addition, Rosenblatt added that its check of Netflix operating data in the third quarter “is not telling a clear story of acceleration.”
Is Netflix a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 18 Buys, 13 Holds, and one Sell assigned in the past three months, as indicated by the graphic above. Furthermore, the average NFLX price target of $465.11 per share implies 31.1% upside potential.
