Netflix Inc shares fell again by 5% on Friday after Goldman Sachs downgraded the streaming giant, which is facing a slowdown in consumer spending and tough competition from Amazon.com and Walt Disney Co.
The streaming platform in April lost subscribers for the first time in more than a decade in a sign of troubled times ahead for the industry as rising prices of food and gas left people with little to spend on entertainment.
Suspending its services in Russia after the Ukraine invasion also took a toll on Netflix.
However before all this, the service had come under fire for attempts at indoctrination as subscribers complained about the streaming platform indiscriminately pushing the LGBTQ agenda, which made many boycott the company.
Goldman downgraded the stock to “sell” from “neutral” and slashed its price target to $186 from $265, the lowest PT among analysts covering the stock, according to data.
Paolo Pescatore, an analyst at PP Foresight said to “Expect to see high levels of churn given the very nature of how streaming services are marketed and sold. Therefore, expect some to pivot more towards a yearly discounted bundle to entice users and increase loyalty.”
Netflix is already considering a cheaper subscription that includes advertising, following the success of similar offerings from rivals HBO Max and Disney+.
Of 48 equity analysts covering Netflix, 12 rates the stock “buy” or higher, 31 “hold” and five recommend “sell” or “strong sell”. Their median price target on the stock is $297.50.