Some U.S. viewers may be less excited about Netflix lately, but one major Wall Street firm has become more optimistic about the stock.
Netflix shares have had a tough year because the company has not released many creative hits to keep viewers interested. The stock is down 26% so far this year and has dropped 36% from its high in April.
Deutsche Bank sees the recent drop as a good chance for investors to buy in. The firm upgraded its view on the stock this week, even though it slightly lowered its price target.
On Tuesday, shares went up 1.5%, bouncing back after falling on Monday.
Deutsche Bank says the market is paying too much attention to U.S. engagement and missing Netflix’s bigger global audience and stronger international trends. The firm pointed out that people are watching more Netflix overseas, and thinks the recent dip in U.S. engagement is likely just a short-term pause in new content, not a long-term problem. They also said Netflix’s strong position in streaming remains unchanged.
However, not all firms are as optimistic. Wells Fargo recently downgraded Netflix and cut its price target by a large amount. Last week, HSBC also became more cautious and moved to a neutral view on the stock.
A lot of this caution comes from worries that fewer people are watching Netflix. HSBC specifically mentioned that YouTube, which is owned by Alphabet, is taking more viewers away from Netflix.
Investors became more uneasy in July when Netflix announced it would only release its main engagement report once a year instead of twice. This led to speculation that Netflix might be losing subscribers to other platforms. Deutsche Bank thinks these worries are exaggerated. While some firms are still skeptical, most Wall Street analysts still have a positive view of the stock, according to FactSet.
