In a note issued before the open, BofA analyst Nat Schindler lowered the firm’s price target on Netflix to $196 from $240 and keeps an Underperform rating on the shares following a survey of over 1,200 U.S. consumers that represented a cross-section of U.S. demographics, geographies, income levels, and age groups. The survey highlighted Netflix as “a must-have service by a wide margin” and indicates Netflix is currently consumers’ top choice, but he believes the results are also indicative that streaming has “very quickly become a commoditized product following the pandemic,” Schindler tells investors. Customers now subscribe to more services on the whole while still keeping Netflix, but it “wouldn’t be surprising to see incremental churn” if a recession were to take hold, while ad-tiering allowing consumers to extend their streaming budget may benefit “Netflix’s competitors much more than Netflix itself,” argues the analyst.
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