Analysts Ring Alarm On Netflix, Disney, Paramount Stocks As Trump Targets Global Film Production: Retail's Already Feeling Nervous

Media and theater chain stocks experienced weakness in Monday's session, with some underperforming the broader market, which declined on interest-rate worries.

The downside catalyst was a call from President Donald Trump to impose 100% tariffs on movies shot outside of the U.S. as he strives for "Movies made in America, Again."

Here's how some big media stocks fared on Monday: 

• Netflix (NFLX): -1.94%
• Warner Bros. Discovery (WBD): -1.99%
• Amazon: -1.91%
• Paramount: -1.57%
• Fox: -0.76%
• Disney: -0.41%
• AMC Entertainment Holdings: -1.49%
• IMAX Corp: -2.09%
• National CineMedia: -1.23%
• Cinemark Holdings: -1.68%
• Lionsgate Studios: -4.07%
• Roku: -1.84%

Comments from sell-side analysts suggest a significant hit to the industry.

The Fly reported that Barclays analyst Kannan Venkateshwar said Netflix's credentials as a "defensive play" amid the tariff threat will be questioned by Trump's proposed move.

The analyst, however, said there is a lack of visibility into how this would be implemented. If deployed on scale, it could harm the very industry it is supposed to help, he said.

The analyst noted that the U.S. exports are triple the amount of the content it imports and generates a surplus of $15 billion.

Citi analysts weighed in on the tariff's potential impact on Netflix. In a worst-case scenario, the proposed tariffs would dent the streaming giant's earnings by 20% or $6 per share.

That said, the analysts expressed confidence in the company's ability to devise options that will likely limit financial risks. These measures could include shifting production to the U.S., restricting U.S. access to content produced abroad, and raising prices to align with the higher production costs.

Morgan Stanley, meanwhile, delved into the potential across-the-board impact. The firm's worst-case scenario analysis showed that the proposed measure would reduce the earnings power of all companies in the value chain. 

The firm sees fewer films due to the tariff-related cost escalation. It also suggested that other nations' retaliatory tariffs could incentivize foreign governments to tax or block U.S. streaming services and/or film releases.

Fund manager Louis Navellier said he expects the proposed tariffs to hurt Netflix and Canada, where most movies are filmed. 

A White House spokesperson downplayed the threat. In a statement to the Hollywood Reporter, he said, "Although no final decisions on foreign film tariffs have been made, the administration is exploring all options to deliver on President Trump's directive to safeguard our country's national and economic security while Making Hollywood Great Again."

By late Monday, retail sentiment toward Netflix stock had turned 'extremely bearish' (19/100), with message volume at 'extremely high levels.'

Most other stocks in the space also evinced ‘bearish' sentiment from retailers.

A Stocktwits poll that asked users what they planned to do with the Netflix stock as a Trump tariff looms large, found that most (37%) looked to sell or trim their holdings. Only 30% said they would buy the dip, while the remaining 33% said they would hold steady or stay on the sidelines.

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