Should investors give up on Netflix?

It has struggled to release hits that drive viewer engagement and, thus, the stock has suffered: As of last Monday, shares were down 26% for the year, and the stock has declined 36% since closing at a recent high of $107.79 on April 16. In Wall Street speak: yuck.

Deutsche Bank analyst Bryan Kraft contends the share price decline is an opportunity. "We believe the current (still very healthy) growth outlook is being undervalued," he said in a client note.

His firm upgraded Netflix stock to Buy from Hold. Kraft believes that Wall Street's obsession with U.S. engagement overlooks the company's larger total market. Why? International engagement time has increased. This year's first half: U.S. minutes viewed were down 8.6.%. The rest of the world: up 5.4%.

"We believe this advantage will allow Netflix to sustain its global leadership position," Kraft said. "While U.S. viewing trends warrant monitoring...it is important to point out that all programmers experience cyclicality."

This view isn't universal. HSBC has downgraded Netflix and noted that Alphabet's YouTube is taking viewer share from Netflix.

Yet Deutsche Bank believes the concern is overblown. And while some firms disagree, the majority are keen on Netflix. Per FactSet: 28 Buy ratings and 17 Hold ratings. So, chill.

Write to Kit Norton at kit.norton@barrons.com

Last Week

September Stocks

The month is typically shaky. How did it compare to Septembers past? The Dow industrials averaged a 1.1% September decline from 1896 through 2025; this year, it took a 4.29% hit. For the S&P 500, it was a 1.1% average decline since 1928 versus -0.45% this year. The Nasdaq? Going back to 1971, it averaged a 0.8% decline. This September: up 1.86%.

AI Angst

OpenAI delayed the release of its GPT-6.1 Astra model. AI agents misbehaved by accessing government websites. Back in D.C., President Trump urged the AI bosses to tone down the gloom. Nobel laureate Paul Krugman joked: "Our technology...can destroy the world, so you'd better invest in our IPO."

No October Surprise?

If you were placing bets on Polymarket that the Federal Reserve would raise rates this month, bad news for you. Three Fed officials indicated there was no rush for a pre-Election Day hike. A soft jobs report also assured Wall Street that the Fed will hold off.

Heat Treatment

Speaking of inflation, Northeasterners are facing a particularly chilling forecast: The National Energy Assistance Directors Association says winter's average heating oil bill will be 50% higher.

Oldies Act

What do you do when you have everything? You sue! Former Commerce Secretary Wilbur Ross, 88, and former casino king Steve Wynn, 84, challenged New York's annual pied-à-terre tax in a state court filing.

Next Week

Monday 10/5

The Institute for Supply Management releases its Services Purchasing Managers' Index for September. Consensus estimate is for a 55 reading, slightly lower than in August.

Tuesday 10/6

Constellation Brands reports quarterly results on Tuesday, followed by PepsiCo on Thursday and Delta Air Lines on Friday.

Wednesday 10/7

The Federal Open Market Committee releases the minutes from its mid-September monetary-policy meeting. At that meeting, the FOMC unanimously voted to raise the federal-funds rate by a quarter of a percentage point, to 3.75% to 4%. With the release of this past week's better-than-expected inflation report and weaker-than-expected jobs report, traders are pricing in a 20% chance that the central bank will raise interest rates at its late-October meeting, down from a 65% chance last week.

Friday 10/9

The University of Michigan releases its Consumer Sentiment index for October. Economists forecast a 47.7 reading, roughly half a point less than the September data. Consumer sentiment remains in the doldrums.

The Numbers

$28 T

Wealth of the top 0.1% richest Americans, doubling since 2019. The gains were mostly from stocks.

8%

Jump in U.S. minivan sales this year through August, to 281,000; total new-vehicle sales declined.

10%+

Yields on some new Paramount debt after the company's record offering of junk bonds.

230%

U.S. stock market relative to GDP-double the level it was during the late-1990s tech boom.

Write to editors@barrons.com