Netflix Stock Plummets as Analysts Lower Targets Amid Warner Bros. Concerns

Netflix’s stock performance has recently taken a significant hit as analysts express concerns surrounding its future profitability and the impending Warner Bros. acquisition.

Major Developments in Netflix’s Earnings

In Netflix’s latest earnings report for 2025, the company announced it concluded the year with over 325 million global paid subscribers. This figure marks an increase from 302 million subscribers by the end of 2024.

Stock Performance and Analyst Reactions

Following the earnings report, Netflix shares reached a new 52-week low of $81.93. This decline was below the previous low of $82.12 recorded in April. The stock recently traded down 5.1% to around $82.84.

Key Analysts’ Insights

• Jeff Wlodarczak, Pivotal Research Group – Stock rating: hold, Price target: $95 (down $10). Wlodarczak noted that subscriber growth is lagging behind projections, prompting him to lower future subscriber forecasts while maintaining a cautiously optimistic outlook on ARPU.
• Laurent Yoon, Bernstein – Stock rating: outperform, Price target: $115 (down $10). He highlighted a solid revenue growth outlook but expressed concerns about margin stagnation, suggesting the company could face challenges in maintaining its stock multiple.
• Brian Pitz, BMO Capital Markets – Stock rating: outperform, Price target: $135 (down $8). Pitz expects Netflix’s advertising revenue to double, further supporting the company’s growth trajectory.
• Ralph Schackart, William Blair – Stock rating: outperform, No price target. He remarked on steady engagement trends but noted the ongoing uncertainty surrounding the Warner Bros. acquisition.
• Alicia Reese, Wedbush – Stock rating: outperform, Price target: $115. Reese emphasized the potential of Netflix’s ad revenue and long-term growth despite near-term volatility.
• Michael Morris, Guggenheim – Stock rating: buy, Price target: $130 (down $15). Morris highlighted the importance of engagement metrics and the potential risks posed by the Warner Bros. bid.

Concerns Surrounding Warner Bros. Acquisition

Analysts are increasingly worried that the Warner Bros. acquisition may complicate Netflix’s path to sustained growth. Many believe that the deal will have a significant impact on Netflix’s stock price movements in the near term.

Several analysts expect Netflix’s advertising revenue to play a crucial role in bolstering the company’s financial metrics, with predictions of reaching $3 billion in ad sales by 2026. Nevertheless, the company’s guidance for profit margins has disappointed, contributing to investor skepticism.

Future Outlook

Despite the ongoing concerns, analysts maintain that Netflix has the potential for considerable growth. Increased advertising revenue and strategic content acquisitions may position the company for recovery in the latter half of the financial year.

In conclusion, while short-term volatility is likely as Netflix navigates the challenges posed by the Warner Bros. deal, the long-term outlook remains positive for investors willing to be patient.