Netflix Stock Gets Downgraded by Wells Fargo on ‘Worrying’ Engagement Trends
Wells Fargo downgraded Netflix stock to "underweight" in a note Friday, citing concerns about user engagement.
Shares of Netflix lost ground, extending their recent slide amid worries about slowing revenue growth.
Netflix shares have taken a hit lately. One group of experts sees the streaming giant's stock falling even further.
Shares of Netflix (NFLX) dropped nearly 5% to close just below $72 Friday, extending their recent slide after analysts at Wells Fargo downgraded the stock. It was one of the leading decliners in the S&P 500 and Nasdaq.
Wells Fargo cut its rating of Netflix to "underweight," from neutral, and slashed its price target to $57 from $80, a new Street low well beneath the $97 consensus. Among the 14 other analysts tracked by Visible Alpha, 12 consider the stock a "buy," with two neutral ratings.
Wells Fargo said Netflix may need to undergo a "content spend reboot," warning that the company's efforts to expand into different kinds of entertainment such as games could come at the risk of "missing the watercooler originals."
Concerns around slowing revenue growth have weighed on Netflix's stock in recent months. With Friday's slump, Netflix shares have lost nearly 25% of their value since the start of the year.
