Wall Street Lowers Netflix Stock Price Targets After Weak Outlook Overshadows Q3 Earnings
Shares of the streamer extended their losses another 4% on Wednesday.
Lucas Manfredi
October 21, 2026
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Netflix stock took another hit on Wednesday, falling 4% as Wall Street analysts cut price targets following weaker-than-expected guidance for 2026, despite a strong third-quarter profit.
The company's projections for a slower revenue growth and lower ad sales in the coming year came as a surprise, especially after recent layoffs that included the departure of key executives and 6% of its total workforce. These cuts came on the heels of failed negotiations for Warner Bros. Discovery's studio and streaming assets and increased competition from YouTube.
Key Takeaways:
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Analyst Response: Some analysts, like PP Foresight's Paolo Pescatore, maintain a positive outlook, emphasizing Netflix's strong content library and upcoming Disney licensing deal. However, they encourage the company to focus on core content creation and "rediscover its magic."
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Price Targets: UBS analyst John Hodulik maintained a "buy" rating but reduced the price target from $115 to $110, citing the soft guidance and engagement challenges.
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Underlying Concerns: The market's reaction highlights ongoing concerns about Netflix's ability to maintain subscriber growth, particularly with a lack of major hits, and the impact of increased competition.
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Recent Developments: The layoffs and strategic shifts come after a year of mixed results, including a failed bid for Warner Bros. Discovery.
Pescatore's Perspective:
"Netflix remains a well-oiled, highly profitable machine, but is focused on too many unwanted distractions. The company needs to get back to basics and focus on compelling content... The recent layoffs signal a broader reset as management looks to cut costs, sharpen priorities, and refocus the business."