Netflix Bets on Live Events and Kids' Content as HSBC Steps to the Sidelines

HSBC cut Netflix to Hold and trimmed its target 21% to $76, citing YouTube's gains in US TV viewing, as Netflix leans into live events and family content.

Netflix is leaning harder into live programming and family fare to reignite viewer engagement, even as Wall Street grows more cautious about the streaming giant's grip on American television time. Shares of the company changed hands at EUR 63.08 on European exchanges Thursday, a gain of 0.6% that left its market value at EUR 267.95 billion.

The stock's recent trajectory tells a more complicated story. Over the past 30 days, the equity has shed roughly 10% as investors digest shifting viewing habits in the United States, Netflix's most important market. HSBC added to the unease on Tuesday, downgrading the shares from Buy to Hold and slashing its price target by 21%, from $96 to $76. The British bank's central worry: YouTube keeps expanding its reach on American television screens, pushing Netflix's share of total US TV viewing time to a multi-year low.

That warning landed alongside an earlier shot from Wells Fargo, which on September 18 had already cut the stock to underweight and trimmed its target from $80 to $57. Those analysts pointed to softening viewer engagement and lamented a shortage of breakout original productions. Not everyone shares the gloom. Some market watchers have kept targets as high as $110, arguing that Netflix's US penetration above 60% remains near a multi-year peak.

Institutional money is just as divided. More than 1,700 holders added to their positions during the second quarter of 2026, yet those purchases were offset by billions of dollars in sales from other fund managers. Insiders, meanwhile, were net sellers to the tune of about $6.15 million over a 90-day window.

Live Sports as an Acquisition Engine

Against that mixed backdrop, Netflix is wagering that real-time content can pull in new subscribers. Live events account for only about 5% of the 2026 content budget and roughly 1% of total viewing hours, according to management. Their impact on sign-ups, however, punches far above that weight: such broadcasts have generated six of the ten highest new-subscription days over the past five years.

A recent illustration came courtesy of WWE RAW, broadcast from Mexico City, which drew more than three million views according to trade press reports. Netflix has already locked up NFL games for 2026, and executive Bela Bajaria confirmed the company has entered preliminary talks for US broadcast rights to the men's World Cup in 2030 and 2034. Rights to the women's tournaments in 2027 and 2031 for the US and Canada are already in hand.

Building Out the Kids' Slate

Alongside its sports ambitions, Netflix is scaling up content for younger audiences, a category that represented about 15% of global viewing hours in the first half of 2026. The company announced a feature film based on "Sesame Street," developed with Rideback and Sesame Workshop, and extended its commitment to animated hits "Gabby's Dollhouse" and "Bad Dinosaurs" with additional seasons and spin-offs.

Management has signaled somewhat slower currency-adjusted revenue growth for the third quarter of 2026, a nod to the fading momentum in viewing hours that the new programming push aims to address. Content spending for the full year is set to rise about 10%, a pace that trails expected revenue growth. On the advertising side, US commitments for 2026 nearly doubled year over year.

Margin Questions Loom Over Spending Plans

HSBC's downgrade also flagged the cost of this investment cycle, warning that heavier content outlays in 2027 and 2028 could weigh on margin expansion. Whether the expanded live and family offerings can stabilize engagement over the long run will become clearer when Netflix reports third-quarter 2026 results and its forward outlook on Tuesday, October 20. The company plans to publish the figures on its investor relations website at approximately 1:01 p.m. Pacific Time — a date that will serve as the key test of how well its business model holds up against rivals competing for the same pair of eyes.