Deutsche Bank analyst Bryan Kraft has upgraded Netflix from hold to buy, indicating confidence in the company's long-term prospects despite a recent drop in share price. Although Kraft reduced his price target from $100 to $95, this still suggests a potential upside of 37% based on Monday's closing price.
Netflix shares have fallen over 14% in September, marking a troubling trend as the stock is down more than 26% year-to-date, which could lead to its largest annual decline since 2022. Concerns regarding user engagement have contributed to this downturn, with Wells Fargo recently downgrading Netflix to underweight due to these trends.
However, Kraft argues that investors are overlooking Netflix's competitive advantages, particularly its strong international production capabilities, with over 60% of its content now produced outside the U.S. He believes that Netflix's brand strength, global subscriber base, and organizational expertise position it well to maintain its leadership in the streaming market.
Following the upgrade, Netflix's stock rose by more than 1%, and overall, the majority of analysts remain optimistic, with 37 out of 51 rating the stock as a buy or strong buy