Deutsche Bank upgraded Netflix (NASDAQ: NFLX) to Buy from Hold on Tuesday, arguing that September's sell-off has created a buying opportunity. Analyst Bryan Kraft lowered his price target to $95 from $100, which still implies roughly 37% upside from Monday's close of $69.23. Shares ticked up more than 1% in premarket trading after the note.
The streamer had fallen more than 14% in September, putting it on pace for its worst month since June, when it plunged 17%. The stock is down about 26% year to date and roughly 48% below its June 2025 peak, approaching the $65 area it touched after July's earnings report.
Kraft's case rests on global scale and production. He argues Netflix has an established competitive advantage and a substantial lead in international production, with more than 60% of production now outside the US. He also says the company has the brand strength, subscriber scale and organizational expertise to broaden its position as a platform, an approach he abbreviates as NAAP, rather than remain a vertically integrated studio.
Valuation is the second pillar. Netflix now trades at about 18 times Deutsche Bank's 2027 earnings estimate, and the firm projects roughly 23% EPS growth in 2027. Kraft views a 40x multiple as never reasonable for a company with a decelerating growth outlook, and he expects Netflix to deploy AI more effectively than rival streaming services. The lower price target reflects reduced operating income and free cash flow forecasts.
The debate on Wall Street is sharp. Wells Fargo downgraded Netflix to Underweight on September 18 with a $57 target, the lowest on the Street, noting that with subscriber numbers no longer disclosed, viewing hours have become the market's main verifiable metric. The firm expects hours for top-100 originals to fall 21% year over year in the second half of 2026. HSBC also downgraded the stock, citing YouTube's record 14.2% share of US TV time in July versus a multi-year low of 7.8% for Netflix.
Evercore ISI is more constructive, with a $110 price target, and 37 of 51 analysts tracked by LSEG rate the stock a buy or strong buy. The gap between the lowest target of $57 and Evercore's $110, a $53 spread on a stock trading near $70, illustrates how divided analysts are over whether weaker engagement is a temporary content issue or a lasting problem. Bulls counter that time spent overlooks a larger addressable market and healthier international engagement trends.
For traders, the shares offer a contrarian setup: a beaten-down large cap with a fresh upgrade in a market otherwise pressured by 5%-plus Treasury yields and elevated oil. The risk is that engagement data continue to disappoint before the next earnings report, and that macro pressure on high-multiple growth stocks persists.