Netflix heads into earnings with bulls unfazed by stock's rough year

Netflix Inc ( NASDAQ:NFLX XETRA:NFC ) reports second quarter earnings tonight, and two major brokerages are sticking with their bullish calls even as the stock has struggled this year. Shares were little changed Thursday at $73.50, but that stability masks a rough 2026 for Netflix investors: the stock has fallen more than 20% year-to-date. Jefferies reiterated its Buy rating and $110 price target, while Bank of America kept its own Buy rating and $125 price objective. Both firms see the pullback as a buying opportunity rather than a red flag, even as they acknowledge the market's patience is being tested. Bank of America attributed the decline to investor worries about engagement trends, the potential impact of artificial intelligence on content creation, and rising competition following a wave of media mergers and acquisitions. The bank pointed to history as a guide. Subscriber growth slowed sharply in 2022, and the stock fell more than 50% as a result, before Netflix responded with paid sharing and its ad-supported tier, moves that reignited growth. A similar bout of margin concerns hit the stock in late 2023, only for another year of strong execution to follow. Management has "consistently demonstrated an ability to adapt to changing market conditions, execute effectively and create long-term shareholder value," the bank wrote. Jefferies doesn't expect a meaningful upside surprise in second quarter or full-year revenue guidance. It's forecasting constant-currency revenue growth of 12% year-over-year for both the second and third quarters, in line with Wall Street.