Netflix's Split-Screen Story: Wells Fargo Sounds the Alarm as Evercore Turns More Bullish

Wells Fargo downgraded Netflix to Underweight, citing weaker engagement; Evercore ISI kept Outperform and raised its target. Q3 earnings land October 20.

Two of Wall Street's better-known research shops are looking at the same streaming company and reaching opposite conclusions — and the market is siding, at least for now, with the pessimist.

Wells Fargo cut Netflix to "Underweight" from "Equal Weight" on Friday, sending the stock down 4.7% to EUR 62.52. Analyst Steven Cahall pinned the downgrade on weakening viewer engagement and a thinner slate of original programming lined up for the back half of the year. His price target now sits at USD 57, slashed from USD 80.

The engagement math is what worries Cahall most. Subscribers averaged roughly 1.6 hours per day on the platform in the first half of 2026 — a decline of about 8% once adjusted, compared with 2023. Netflix's slice of total US television viewing has also slipped beneath the 8% mark. On top of that, Wells Fargo projects the hours of top-100 original content available in the current second half could shrink 21% year over year.

Earnings estimates came down alongside the target. The firm now models earnings per share of USD 3.77 for 2027 and USD 4.52 for 2028, applying a valuation multiple of 15 times expected profit.

Evercore Digs In on the Bullish Side

Evercore ISI isn't budging. The investment bank reaffirmed its "Outperform" rating and actually raised its Netflix price target to USD 110 from USD 100, citing an updated valuation model that stretches through 2028. Analyst Kutgun Maral pointed to household penetration hitting a multi-year high in the US, with Japan notching record levels.

The split verdict leaves Netflix carrying a market capitalization of EUR 282.38 billion, a figure both camps can agree on even if little else.

Content performance offers ammunition to the optimists. Nielsen data for the first week of September put the Robert De Niro thriller The Whisper Man atop the film charts with 863 million minutes streamed, beating out well-known competition from Disney+. Series including Outer Banks and Beauty in Black have also been pulling in more than a billion minutes apiece per week.

Live Sports as the Engagement Fix

Management's answer to flagging watch time is a heavier bet on live events. Chief Content Officer Bela Bajaria has framed the strategy around marquee sports properties. Netflix has locked up rights to five games for the 2026-27 NFL season, and it holds the broadcast rights for the Women's World Cup in both 2027 and 2031. Reports also point to interest in tie-ups around the men's FIFA World Cups in 2030 and 2034 — a push aimed at making the platform indispensable to a wider audience while shoring up advertising revenue.

A Date With the Market: October 20

Investors won't have to wait long for a reality check. Netflix has set October 20 for its third-quarter 2026 earnings release, scheduled for roughly 1:01 p.m. Pacific Time after the US West Coast market close. The report will arrive as analysts recalibrate their expectations, and as institutional money has been moving in both directions.

SEC filings show VELA Investment Management grew its stake by 240.2% in the second quarter of 2026, while Baird Financial Group added 44.2%. TD Waterhouse Canada went the other way, trimming its position by 17.1% over the same stretch.

Behind the scenes, the content operation is getting a reshuffle. Jinny Howe is taking over scripted series, succeeding Peter Friedlander, according to the Los Angeles Times. Howe will report directly to Bajaria — a change that speaks to the pressure to keep both the quality and the output of originals steady in a crowded field.

Internationally, Netflix continues to lean on localizing proven formats. Love Is Blind: Netherlands premieres its first season on September 30, extending a reality-TV playbook that has already worked in numerous other markets.

Ahead of Friday's session, the stock was quoted at EUR 66.08 pre-market, up 0.7% from the prior day. Whether the analysts' optimism and the confidence of large holders hold up will hinge largely on user trends — the very metric likely to dominate next month's quarterly report.