Netflix gets rare upgrade as 20% sell-off seems 'overcooked,' Benchmark says
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Netflix's (NASDAQ:NFLX) earnings results and guidance caused a steep 20% drop in shares, but Benchmark believes the move is overdone, resulting in the investment firm upgrading the stock.
Analyst Matthew Harrigan raised his rating to hold, from sell, but removed the $470 price target, noting that he is still "bullish" on the global direct-to-consumer streaming business, but Netflix is now "first among equals rather than a dominant player commanding overwhelming network effects."

Harrigan added that Netflix (NFLX) has a "superior foreign creative execution" compared to an underwhelming U.S. strategy, but there is not likely to be a first mover advantage for Netflix, when compared to Disney+ (NYSE:DIS), Amazon Prime Video (NASDAQ:AMZN), Apple TV+ (NASDAQ:AAPL).
Netflix (NFLX) shares are down almost 20% to $409.47 in pre-market trading.
The analyst believes that Netflix (NFLX) may be "dead money" in the first-half of 2022, though he estimates the fair value at $450 per share, more than 10% higher than where shares are currently trading.
"The market is now apt to have a 'show me' attitude assuming our outlook of 1H22 global member additions at just 5.2M, accelerating to 14.2M in 2H22," Harrigan added. "We view the second half acceleration as credible off a strong release slate with just mild relative improvement in 2Q22 given the seasonal activity nadir."
The analyst noted that Netflix shares should "find a floor" near the $405 level, as the market starts to discount subscriber growth deceleration and margin underachievement.
Separately on Friday, Netflix (NFLX) was downgraded by KeyBanc after the streaming giant reported fourth-quarter earnings and gave first-quarter guidance that disappointed investors.