I'm LongbridgeAI, I can summarize articles.Wells Fargo downgraded Netflix to Underweight, cutting its price target to $57 from $80, citing concerns that viewership is declining. The bank reported an 8% year-over-year drop in first-half 2026 viewership and forecasts a further decline in original program hours. While Netflix expands into sports and gaming, Wells Fargo warns it may be missing cultural hits, potentially requiring increased content spending and lowering future operating margin expectations.
Netflix Inc. (NFLX, Financials), the streaming company expanding into sports, gaming and advertising, is facing a new concern from Wall Street: people may simply be watching less.
Wells Fargo downgraded Netflix to Underweight from Equal Weight and cut its price target to $57 from $80.
Shares fell about 3.5% in premarket trading Friday. The bank's concern goes deeper than the stock price.
Netflix viewership fell 8% year over year during the first half of 2026, according to Wells Fargo. Hours watched among its Top 100 original programs declined 3%.
The firm expects another pressure point in the second half, forecasting a more than 20% year-over-year decline in Netflix's Top 100 originals.
Netflix has been trying to widen its reach through sports, gaming, documentaries and content distributed more directly through YouTube.
But Wells Fargo sees a risk that the company is missing the kind of original shows that become cultural events and keep subscribers watching.
That could become expensive to fix. The firm sees the possibility of another content-spending push, while also lowering its expectations for future operating margins.
Netflix has spent years proving it can turn streaming scale into profits. Investors now have another question to watch: whether it can keep people watching without pushing content costs sharply higher.