Netflix (NFLX)
HSBC Securitie downgraded Netflix’s shares from a Buy to a Hold rating and cut its 12-month price target to $76 from $96, a reduction of nearly 21%. BMO Capital Markets reiterated its Outperform rating and $135 price target, leaving a wide gap between the two firms’ outlook expectations.
HSBC’s concern centres on competition for viewers, particularly from YouTube, and the possibility that higher content spending will weigh on future earnings. BMO sees a stronger case for the stock: its consumer survey found that Netflix remained the preferred streaming platform among respondents, while the firm expects growth in advertising revenue to strengthen the business. These are competing forecasts about whether Netflix can keep viewers engaged and turn that engagement into profitable growth.
Netflix’s latest reported results give both sides evidence to watch. Second-quarter revenue rose 13% from a year earlier to $12.6 billion, and the company reported a 33.4% operating margin. Viewing hours grew 2% in the first half of 2026. Even so, Netflix forecast slower revenue growth of about 12% for the third quarter, making the pace of growth and the cost of producing content important tests of the bullish case.
For investors, the question is whether advertising growth and Netflix’s established audience can offset tougher competition and rising content costs. The upcoming earnings results will show whether the company’s revenue growth holds up, margins remain resilient, and viewer engagement improves enough to justify BMO’s optimism, or whether further analysts move toward HSBC’s more cautious downgraded outlook.
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