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LivestreamMenuDominant streaming platform Netflix reports earnings after the bell on Thursday, and analysts are sounding hard-pressed to find a meaningful driver for the stock. Netflix shares have sagged 19% year-to-date and more than 40% over the past 12 months, and there’s not much on the horizon that looks like it could snap the stock out of its stupor. Analysts at Jefferies said in a report last week that they were “still searching for a catalyst.” Citigroup analysts pointed to a “lack of catalysts” in a note the day before that, and Morgan Stanley researchers this week said that the “catalyst path” for Netflix was “tricky.” As the search for a spark continues, sentiment around the $310 billion company remains negative. Top short idea A recent survey from Guggenheim, which sampled more than 100 online investors, shows Netflix to be the top short selling idea going into second-quarter earnings, according to a Wednesday client note. “The overarching question for shares is whether the 2030 growth framework … remains achievable through the current business, or whether competitive pressures and changes in consumer demand have altered the trajectory,” Michael Morris at Guggenheim wrote. Some analysts are thinking that inspiration could strike in the form of an acquisition, following big recent moves in the sector, such as the pending purchase of Warner Brothers Discovery by Paramount Skydance and the planned spin-off of NBCUniversal from Comcast . “Netflix’s M & A posture looks meaningfully more active than its historic ‘builder, not buyer’ stance,” Jessica Reif Ehrlich at Bank of America wrote in a Tuesday analysis. She thinks that an acquisition “could put the business on stronger footing” but questioned whether Netflix could “retain its historic premium post-deal.” Live TV bundling Netflix is also considering whether to add live television and bundled subscriptions to its streaming model in the manner of a traditional cable business, according to a July report in the Wall Street Journal. In April, the Journal reported that by 2030 Netflix wants to double its revenues from $39 billion and have a market capitalization of $1 trillion– more than triple its current size of $310 billion, according to FactSet data. In the meantime, Wall Street is focusing on core engagement and topline metrics to see if Netflix can stay on top of its targets. These include subscriber losses due to recent price increases – known as churn – and whether second-quarter subscriptions hit internal expectations. Analysts also want to know how much Netflix is going to spend on shows that are in the production pipeline. “We’re most focused on how U.S. churn is tracking vs. prior price increases, incremental explanations for engagement weakness, if Q2 subs landed below internal [expectations], and color on content spend needs past FY26,” James Heaney at Jefferies wrote to clients last week. Jefferies has a buy rating on Netflix and a 12-month price target of $110. Bank of America similarly rates Netflix a buy with a more aggressive price target of $125.Read More
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