Netflix Stock Downgraded Over ‘Worrying’ Engagement and YouTube Competition by HSBC, Wells Fargo
Shares of the streamer are down 40% in the past year and 23% in the past six months The post Netflix Stock Downgraded Over ‘Worrying’ Engagement and YouTube Competition by HSBC, Wells Fargo appeared first on TheWrap .
Netflix's stock has experienced a significant decline over the past year, with a 40% drop and 23% decrease over the past six months. This drop in value has led to concerns among Wall Street investors, particularly regarding Netflix's engagement and competition from YouTube. HSBC analyst Mohammed Khallouf recently downgraded Netflix from a Buy to Hold rating, citing YouTube's expanding "living room footprint" as a major factor.
Khallouf argued that the decline in Netflix's share of U.S. TV time to 7.8% in July indicates a "rapidly expanding" footprint, which has been negatively impacted by the reception of Netflix's original content. Additionally, Wells Fargo analyst Steve Cahall also downgraded Netflix, citing "worrying" engagement trends. Cahall estimated that Netflix's members watched an average of 1.6 hours a day in the first half of 2026, a 8% decline compared to the same period in 2023.
He warned that the decline in hours spent watching Netflix's top 100 original programs could reach 21% year-over-year in the second half of the year. Despite these challenges, Netflix has been pushing into various areas such as podcasts, live events, sports, vertical video, and gaming in an attempt to boost engagement. The company has also made efforts to attract YouTube talent to its platform and expanded its content lineup internationally through a partnership with French broadcaster TF1.
Netflix faces competition from major players such as Disney and Paramount, with the latter set to complete a $110 billion merger with Warner Bros. Discovery. Once the merger is finalized, Paramount-WBD would become the second-largest TV distributor by U.S. viewership, though its streaming viewership still lags behind Netflix. As of Wednesday afternoon, Netflix's stock was trading at $71.74, well below its 52-week high of $124.86 but above its 52-week low of $65.08.
Netflix's stock has seen a 21% decline over the past year, 10% in the past month, and 6.6% in the past five days, but it has still increased by 21% over the past five years.
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