Netflix shares fell 5.3% on Wednesday to their lowest close since August 2024 after the company cut its 2026 advertising target and guided fourth-quarter sales below forecasts. The stock also closed under a key technical floor. Analysts mostly kept Buy ratings while trimming price targets.
Netflix stock fell 5.3% on Wednesday to close at $65.04 on Nasdaq. The streamer cut its 2026 advertising revenue target and guided fourth-quarter sales below analyst forecasts.
Outlook overshadows a third-quarter beat
The third-quarter report, released on Tuesday, showed earnings per share of $0.87 against a $0.82 consensus, with revenue of $12.87 billion in line with expectations.
Investors focused on the outlook instead. Netflix now expects about $2.7 billion in 2026 ad revenue, down from roughly $3 billion. It also guided fourth-quarter revenue of $13.44 billion against the $13.51 billion analysts had expected.
Shares close below the $65.11 support
Shares touched $64.10 during the session, a new 52-week low. The close landed 7 cents below the $65.11 support level that held during the July sell-off.
The stock is 51% below its June 2025 peak of $134.09. It also trades under its 50-day exponential moving average at $72.92 and its 200-day EMA at $82.61.
The author's chart shows nearer supports at $58.86, $54.41 and $48.36. A daily close back above $65.11 would turn the move into a false break, and a recovery above $70.45 would cancel the bearish scenario for now.
Analysts trim targets
Most banks kept Buy ratings while cutting targets. Bank of America lowered its target to $90 from $105, and Morgan Stanley went to $77 from $80.
Needham analyst Laura Martin downgraded the stock to Hold from Buy and withdrew her $120 target. Deutsche Bank analyst Bryan Kraft, who rates Netflix Buy with a $93 target, said, according to TheWrap: "the market's reaction was overly punitive".
The weekly close on Friday, October 23, is the next test, and a finish below $65.11 would confirm the break on a higher timeframe.
Source: Finance Magnates
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