Netflix(US:NFLX) Zhi Tong Cai Jing·2025-07-31 07:08Core Viewpoint - Phillip Capital downgraded Netflix (NFLX.US) from "Neutral" to "Sell," maintaining a target price of $950 due to recent stock price increases and concerns over high valuation and declining viewer engagement, which may hinder the goal of doubling advertising revenue by 2025 [1] Group 1: Rating Adjustment - The downgrade is attributed to the stock being "overvalued" and a decrease in audience engagement, which could impact advertising revenue [1] - Phillip Capital maintains a cautious outlook despite recognizing Netflix's strong resilience and minimal impact from tariffs [1] Group 2: Market Position and Performance - Netflix continues to lead in the video-on-demand sector, benefiting from significant pricing advantages and improving profit margins [1] - The diversified content library is yielding positive results and is expected to continue providing returns [1] Group 3: Subscriber Growth and Revenue Implications - Although subscriber growth may accelerate, the average revenue per viewer is declining, influenced by a projected 14% revenue growth in the first half of 2025 [1] - Decreased user engagement leads to fewer ad impressions per user, directly affecting advertising revenue, partly due to Netflix's restrictions on account sharing [1]