Downgrade, Steep Price-Target Cut Dings Netflix Stock

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Wells Fargo downgraded Netflix to 'underweight' and cut its price target from $80 to $57, citing engagement concerns and lower expected margin expansion. Consequently, Netflix shares dropped 4.8% to $71.72, extending a three-day slide and dipping below the 60-day moving average. The stock is approaching two-year lows of $65.08 but shows an RSI of 35, suggesting potential for a short-term bounce despite being down 23% year-to-date.

Shares of Netflix (NASDAQ:NFLX) have dropped 4.8% to trade at $71.72 this morning, after Wells Fargo downgraded the streamer to "underweight" and readjusted their price target to $57 from $80. The analyst in coverage cited engagement trend worries and expectations for lower 2027 and 2028 margin expansion as the company prepares lesser-than-expected content for the remainder of 2026.

The shares are poised to stretch their three-day slide to four and have dipped below the 60-day moving average for the first time in a month, as the stock moves toward July 17 two-year lows of $65.08.

It's worth noting, however, Netflix stock sports a 14-day Relative Strength Index (RSI) of 35 — on the cusp of "oversold" territory, suggesting a short-term bounce may be in the cards. The shares are down 23% year to date.

Options are attractively priced at the moment. Netflix's Schaeffer's Volatility Index (SVI) of 32% stands higher than just 5% of all other readings from the past year. It's also worth noting, NFLX's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 93 out of 100, indicating Netflix stock has tended to exceed option traders' volatility expectations during the past year.

Source: Schaeffers The copyright of this article belongs to the original author/organization.

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