The sell-off in Netflix shares deepened in Friday’s trade, with the stock falling another 7% to $70.11 apiece, marking its fourth consecutive session of losses and taking it to its lowest level in nearly two months.
The decline came after Wells Fargo Securities downgraded the streaming video company to Underweight, citing concerns over user engagement. The downgrade marked the first bearish analyst rating on the streaming giant in months.
Wells Fargo issued a double downgrade, cutting its rating to Underweight from Equal Weight and lowering its price target to $57 from $80.
Despite maintaining its position as the world’s largest paid streaming platform by subscribers and viewership, Netflix’s revenue growth has continued to moderate. In the first half of 2026, the company experienced a relatively weak pipeline of original content with several returning series failing to match the viewership of their earlier seasons.
Wells Fargo analysts estimate that Netflix viewership could fall 4% year-on-year in the second half of 2026, including a decline of more than 20% for its Top 100 Netflix Originals. The estimate follows their review of more than 150 key titles across live events, shows, and films, according to media reports.
The analysts also said Netflix appears to be broadening engagement by taking content more directly to YouTube while expanding its focus on gaming, documentaries, and sports. However, they cautioned that the company faces a shift in its content mix and risks “missing the water cooler originals.”
Wells Fargo also pointed to tougher content decisions ahead, saying Netflix faces options including a “content spend reboot” and a “messier NFLX story.” The brokerage said the stock could become harder to forecast, while its earnings estimate remained slightly below consensus.
For the June quarter, Netflix reported revenue of $12.56 billion, up 13% year-on-year, marginally below analysts’ estimates. Net income rose to $3.40 billion, or 80 cents per share, from $3.13 billion, or 72 cents per share, in the corresponding quarter last year.
Netflix narrowed its full-year 2026 revenue guidance to $51 billion-$51.4 billion, compared with its earlier forecast of $50.7 billion-$51.7 billion.
Netflix shares extend prolonged downtrend
The latest decline adds to a prolonged sell-off in Netflix shares, which have remained under pressure since hitting a record high of $134 in June 2025. The stock has since lost more than 48% of its value. Over the past 12 months, Netflix shares have closed lower in 9 months, resulting in a cumulative decline of 28%.
So far in 2026, the stock has fallen 23%, putting it on track for its worst annual performance since 2023. Despite the sharp correction, Netflix shares remain up about 197% over the past four years, following a remarkable rally of nearly 580% between May 2022 and June 2025.
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