Netflix ( NASDAQ:NFLX )
On Tuesday afternoon trading, Netflix stock was battered, falling 5.3% on a one-two-three punch of negative news from Wall Street.
A price decrease, a bad preview of the Netflix ( NASDAQ:NFLX ) third-quarter earnings report , and a harsh critique of the company’s plan to offer an ad-supported tier to its streaming service quickly blow to Netflix stock price.
What’s the Reason for Netflix Stock Decline?
Three pieces of bad news have come at once for Netflix ( NASDAQ:NFLX ) today, starting with a report from StreetInsider that Goldman Sachs has lowered its price target on Netflix stock to $182 and continues to retain a sell recommendation on the Netflix stock.
Bank of America, which began the day on an upbeat note by agreeing with the consensus that Netflix would gain 1 million subscribers in its Q3 report (coming out next week), report $7.8 billion in sales, and earn $2.10 per share, has now downgraded its recommendation to “sell.” BofA’s initial optimistic outlook swiftly became pessimistic, with the lender speculating that Netflix may have gained members in the quarter primarily because of Stranger Things season four. While some may see this as a sign of strength, BofA argues that it just furthers the evidence that “sub-additions may be substantially more hit-driven than recent years” and that “Stranger Things will be a challenging act to follow” in coming quarters.
But you may be wondering about Netflix’s plans to provide ad-supported subscriptions. Bank of America warns, “we don’t believe [an ad-sponsored streaming pl...
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