Netflix’s Content Chief Change Could Help Fix Engagement Woes, Wedbush Says

• KeyBanc, Morgan Stanley, Barclays and Huber Research have also lowered their Netflix price targets this month.
• Wedbush said engagement remains a concern for bearish investors but expects advertising revenue to double to roughly $3 billion in 2026.
• Its repricing comes after Netflix announced that its current chief content officer, Bela Bajaria, would be stepping down, and that former Disney executive Peter Rice would be taking her place. 

Netflix (NFLX) received another price target cut from Wall Street in a slew of re-pricings this month, with the stock tumbling in early morning trade after announcing a leadership change on Wednesday, ahead of its third-quarter earnings due next week.

In a note to investors cited by TheFly, Wedbush cut the price target on Netflix to $90 from $105, and reiterated an ‘Outperform’ rating. It pointed to the leadership shuffle as one of the many changes at the company that should address its engagement issues and shift dollars from heavy infrastructure spending to more focused content spending.

Netflix announced on Thursday that its current chief content officer, Bela Bajaria, would be stepping down, and former Disney executive Peter Rice would be taking her place. 

NFLX stock fell as much as 3% in pre-market trade and was among the top-trending tickers on Stocktwits at the time of writing. Wedbush’s new price target implies a potential upside of around 23% from Thursday’s close.

Wedbush Cuts Netflix Price Target To $90 Ahead Of Earnings

Wedbush noted that engagement was the central concern in the bear case forming around the company.  However, the firm said ad revenue should be the focus for investors, noting that Netflix is on track to double it to roughly $3 billion by the end of the year and that the recently announced leadership change is a positive catalyst.

KeyBanc, Morgan Stanley, Barclays and Huber Research have all reduced their price target on Netflix this month. 

Netflix also reportedly laid off around 1,000 employees this week. Co-CEOs Greg Peters and Ted Sarandos said in a company-wide email the measure was in line with the streaming giant being more “disciplined” with its people and resources. They added that Netflix was on track to meet its full-year forecast and would continue to “invest aggressively  in high-impact areas.”

Retail Debates Netflix Content Chief Change

On Stocktwits, retail sentiment around Netflix continued to trend in ‘bearish’ territory over the past day, alongside chatter at ‘normal’ levels. Retail traders on the platform debated whether the change in leadership at the company signaled a positive content reset or if it was an acknowledgment of investor concerns around programming.

Others were more focused on Netflix’s earnings next week. Wall Street is expecting the company to report earnings per share (EPS) of $0.82 on revenue of $12.8 billion, according to Koyfin data.

NFLX stock has fallen over 20% this year and almost 40% in the last 12 months.

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