Several Wall Street firms have lowered their price targets for Netflix (NASDAQ: NFLX) ahead of the company’s second-quarter earnings report, reflecting concerns about valuation rather than a weakening outlook for the streaming giant. Despite the revisions, analysts continue to maintain Buy-equivalent ratings, signaling confidence in Netflix’s long-term business even as near-term growth moderates.
According to Stocktwits, Oppenheimer reduced its price target from $120 to $100, while KeyBanc lowered its target from $115 to $92. The moves follow similar target reductions from Citi and Bernstein, both of which recently cut their targets to $100 while keeping positive ratings on the stock.
Valuation concerns drive analyst caution
Analysts say the target reductions are primarily tied to Netflix’s valuation, which they believe remains high compared with peers despite slowing revenue growth. Citi also highlighted softer viewership trends, fewer near-term catalysts, uncertainty surrounding mergers and acquisitions, and investors shifting capital toward semiconductor stocks as additional factors weighing on sentiment.
Another lingering issue is Netflix’s abandoned pursuit of Warner Bros. Discovery. Although the company ultimately walked away from the proposed acquisition, the discussions prompted questions about Netflix’s long-term inorganic growth strategy. Leadership changes, including founder Reed Hastings’ departure as chairman earlier this year, have also contributed to investor uncertainty.
Netflix is scheduled to report its second-quarter earnings later this week, with Wall Street forecasting approximately $12.58 billion in revenue and earnings per share of $0.79. Analysts will also closely monitor operating margins, advertising revenue progress, and user engagement after Netflix stopped regularly reporting subscriber numbers earlier this year.
The company has guided for a 32.6% operating margin in the quarter, while investors are looking for signs that advertising initiatives remain on track to meet Netflix’s full-year targets. With the stock down more than 20% year-to-date, the upcoming earnings report is expected to play a key role in determining whether confidence returns to the streaming leader.