Analysts on Wall Street have revised their price targets for Netflix following the streaming giant’s narrow earnings and revenue beat in its latest quarterly report. The company reported earnings of 56 cents per share on $12.05 billion in revenue, slightly surpassing analysts’ expectations of 55 cents per share and $11.97 billion, respectively. However, concerns about declining viewer engagement, specifically in average viewing hours per member, overshadowed these positive results. Netflix’s shares fell by 7% in premarket trading after the announcement.
The report has raised red flags for industry analysts, particularly regarding a year-over-year growth of just 2% in viewing hours per member, which represents a 7% decline compared to projections for 2025, according to Guggenheim Partners. Analyst Jeffrey Wlodarczak from Pivotal Research Group highlighted the challenges Netflix faces from short-form entertainment platforms like TikTok and Instagram, which are capturing more attention from consumers, particularly younger audiences. Wlodarczak noted, “While engagement appeared to slightly accelerate to +2% from +1%, we remain concerned that short-form entertainment is doing to streaming what streaming has done to traditional TV, affecting long-form content negatively.”
Concerns extend to Netflix’s potential deal with Warner Bros. Discovery, which analysts fear may face delays due to approval risks and ongoing competition. Wlodarczak remarked that the costly nature of the deal indicates management’s awareness of the growing challenges posed by short-form content. This sentiment was echoed by Hamilton Faber at Rothschild & Co. Redburn, who pointed to underwhelming guidance as another area of disappointment, stating, “Q1 and full year guide light, mainly on costs.”
Despite these concerns, most analysts retain a long-term positive outlook but are adjusting their price targets. Pivotal Research maintains a hold rating with a revised target of $95, down from $105, suggesting a potential downside of about 9%. The firm acknowledged Netflix’s solid fourth-quarter results but noted that the subscriber count of 325 million fell short of their expectations by nearly 10 million.
KeyBanc Capital Markets, with an overweight rating, lowered its target to $108 from $110, indicating a potential 24% upside. They noted the mixed results but expressed confidence in Netflix’s growth potential despite uncertainties surrounding engagement and the Warner Bros. deal. Rothschild & Co. Redburn reduced their target from $145 to $120, emphasizing the significance of Netflix surpassing 325 million subscribers but highlighting concerns over advertising revenue falling short of expectations.
Canaccord Genuity also revised its target down from $152.50 to $125, reflecting a persistent downward pressure on stocks attributed to anticipated engagement metrics and increased spending. Still, analyst Maria Ripps believes that Netflix’s strong position in original content will drive ongoing growth.
Analyst Michael Morris at Guggenheim Partners set a buy rating with a target of $130, down from $145, emphasizing Netflix’s slight fourth-quarter beats but cautioning about engagement trends. Jefferies has also issued a buy rating with a target of $134, anticipating a 54% upside based on overall growth and reaffirmed long-term targets.
As Wall Street digests Netflix’s latest earnings report, the path forward appears filled with challenges and opportunities, leading to mixed but cautious optimism among analysts.
Original Source: https://www.cnbc.com/2026/01/21/netflixs-fourth-quarter-results-left-the-street-disappointed-where-analysts-see-the-stock-going.html
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Publish Date: 2026-01-21 17:50:00
