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Goldman downgrades Netflix to sell as recession risk

Netflix Inc shares fell 5% on Friday after Goldman Sachs downgraded the streaming giant, which is facing a slowdown in consumer spending and tough competition from Amazon.com and Walt Disney Co.

The streaming pioneer in April lost subscribers for the first time in more than a decade in a sign of troubled times ahead for the industry as rising prices of food and gas left people with little to spend on entertainment. Suspending its services in Russia after the Ukraine invasion also took a toll on Netflix.

Goldman downgraded the stock to "sell" from "neutral" and slashed its price target to $186 from $265, the lowest PT among analysts covering the stock, according to data from Refinitiv.  

Netflix is already considering a cheaper subscription that includes advertising, following the success of similar offerings from rivals HBO Max and Disney+.

Of 48 equity analysts covering Netflix, 12 rate the stock "buy" or higher, 31 "hold" and five recommend "sell" or "strong sell". Their median price target on the stock is $297.50.   

NFLX.us D1 06 10 2022 1746

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