Netflix (NASDAQ:NFLX) Stock Downgraded by HSBC and Wells Fargo Amid Engagement Challenges

Font: Financial Modeling Prep  • Sep 22, 2026

• Investment firms HSBC and Wells Fargo have downgraded Netflix, citing "worrying" subscriber engagement trends and a significant drop in viewership time.
• Despite a recent short-term gain, Netflix stock has experienced a substantial decline of over 40% in the past 12 months, reflecting significant market volatility.
• Looking ahead, analysts project positive Q4 2026 earnings for Netflix, with an expected Earnings Per Share (EPS) of $0.82 and revenue of $12.88 billion.

Netflix (NASDAQ:NFLX) is a global streaming entertainment service. The company offers a wide variety of TV series, documentaries, and feature films across many genres and languages. It faces intense competition from other streaming platforms and the rise of short-form video content, which impacts user engagement and subscription growth.

Reflecting recent market challenges, investment firm HSBC downgrades its rating for Netflix from Buy to Hold, as reported by TheFly. This action occurred when the stock was priced at $73.36. This follows a similar move by Wells Fargo, which cut its rating to "underweight," citing significant concerns about the company's performance.

The downgrades stem from "worrying" engagement trends, as highlighted by Investopedia. Wells Fargo notes an 8% drop in viewership time per subscriber in the first half of the year. Analysts suggest a lack of "big original series" and weaker overall engagement are key factors contributing to this decline.

Despite these concerns, Netflix stock closed the recent trading day at $73.36, a 2.19% increase. However, this short-term gain contrasts with its longer-term performance. The stock has fallen over 40% in the past 12 months and remains below key moving averages, indicating significant investor uncertainty and market volatility.

Investors now look to the upcoming earnings report on October 20, 2026. According to Zacks Investment Research, projections are positive. The company is expected to report an Earnings Per Share (EPS) of $0.82, a 38.98% year-over-year increase, and revenue of $12.88 billion, up 11.9% from the prior year.