Netflix (NFLX) shares fell nearly 5% on Friday. Wells Fargo downgraded the stock to Underweight from Equal Weight. The firm slashed its price target from $80 to $57, suggesting a potential 24% downside.
Analyst Steven Cahall cited declining user engagement as the primary reason for the bearish outlook. Viewership fell 8% year-over-year during the first half of 2026. Viewing hours for the top 100 original titles are projected to drop by more than 20% in the second half.
Wells Fargo expressed concern that expansion into games, documentaries, and live sports risks diluting the core formula of watercooler originals. The firm lowered its operating margin forecasts for 2027 and 2028. Analysts anticipate financial pressure from the upcoming content slate.