Read Why Benchmark Is Bearish On Netflix

Benchmark analyst Matthew Harrigan reiterated a Sell on Netflix Inc NFLX and lowered the price target to $470 from the prior $485 (21.4% downside).
The analyst believes Netflix is “more of a media name than a moated category killer tech entrant.” The analyst remains on the Sell-side as “creative execution remains erratic.”
It is unclear how event projects like Red Notice, Netflix’s most-viewed despite mediocre reviews, enhance member growth versus original series or evergreen IP like Seinfeld.
Valuation is vulnerable to inflationary expectations given limited immediate free cash flow and possible consumer intractability in tolerating price increases.
All else equal, an increase in anchored inflation expectations to 4% from 2% as suggested by former Treasury Secretary Larry Summers would lower the 2022 NFLX fair valuation to $390, the analyst said.
The international Forex market is also creating a headwind for Netflix, with the analyst seeing a 3.5% to 5% hit to 2022 results not reflected in the consensus.
The analyst also took note of the research conducted by the UK creative research firm Enders Analysis, which showed that European SVOD penetration would peak below US levels.
Earlier this week, Netflix slashed its pricing for India to 199 rupees ($2.62) monthly for its basic plan.
Price Action: NFLX shares traded lower by 0.93% at $592.43 in the market session on the last check Wednesday.