Netflix shares closed at $69.58 (R1,136) on 30 September, extending a slide that has wiped 42% off the streamer’s value in a year and left the stock near its 52-week low of $65.08 (R1,063). Despite the sell-off, BMO Capital Markets analyst Brian Pitz has kept an Outperform rating and a Street-high price target of $135 (R2,205), implying a gain of about 92% from the previous day’s close of $70.30 (R1,148).
The divide among analysts has widened this month. Deutsche Bank’s Bryan Kraft upgraded the stock to buy on 29 September while trimming his target to $95 (R1,551) from $100 (R1,633), arguing that Netflix can grow into a broad entertainment platform rather than remain only a producer of programming. Earlier in September, Wells Fargo cut its rating to underweight over engagement trends. The shares fell more than 14% in September, their worst month since June, when they dropped 17%.
Of 51 analysts covering the company, 35 rate it a buy or strong buy and 16 a hold, with none recommending a sale. Their average target of $92.93 (R1,518) sits about 32% above the current price, a wider gap than at rival Walt Disney.
| Metric | Netflix | Walt Disney |
|---|---|---|
| Share price (29 Sep) | $70.30 (R1,148) | $105.47 (R1,722) |
| Year-to-date move | -25.0% | -6.6% |
| Average analyst target | $92.93 (R1,518) | $126.61 (R2,068) |
| Implied upside | 32% | 20% |
The central concern is engagement. Viewing hours rose 2% in the first half of 2026, while Netflix expects content amortisation to climb about 10% this year. In July the company said it would publish its viewership report annually instead of alongside quarterly results, stating it wanted attention kept on revenue and operating profit.
Second-quarter results added to the unease. Revenue rose 13% to $12.56bn (R205.1bn), fractionally below the $12.58bn (R205.4bn) consensus, while earnings per share of $0.80 (R13.06) narrowly beat forecasts. Free cash flow fell to $1.53bn (R25bn) from $2.27bn (R37.1bn), and the shares dropped more than 7% the following day. The results followed the collapse of Netflix’s $82.7bn (R1.35trn) deal for Warner Bros, which lost out to a rival bid from Paramount Skydance.
BMO’s case rests on three pillars. Pitz expects the ad-supported tier to drive subscriber additions while yielding higher-margin revenue per user. Netflix forecasts advertising income will roughly double to about $3bn (R49bn) in 2026, from more than $1.5bn (R24.5bn) last year. BMO’s survey found Netflix reaches about 75% of US consumers and remains their preferred streaming service. Live events form the third pillar: six of the ten strongest sign-up days in five years came from live programming, although live content accounts for about 1% of viewing hours.
Management has held full-year revenue guidance at $51bn to $51.4bn (R833bn to R839bn), growth of 13% to 14%. It expects third-quarter revenue of $12.86bn (R210bn), earnings per share of $0.82 (R13.39) and an operating margin of 33.2%, up from 28.2% a year earlier. Netflix repurchased $4.7bn (R76.8bn) of shares in the second quarter and has $27.1bn (R442.5bn) of buyback authorisation remaining.
The stock trades at about 19 times forward earnings and below its 50-day and 200-day moving averages of $75.54 (R1,234) and $84.58 (R1,381). It has fallen 25% this year while the S&P 500 has gained about 12%. Third-quarter results will show whether advertising growth can offset slower engagement.