Written by Brenda Nakalema

AT&T, Disney, and Roku stock fall in the aftermath of Netflix’s earnings

After Netflix reported a weak first-quarter guidance, Wall Street lowered its ratings on the video streaming giant. This move also …

After Netflix reported a weak first-quarter guidance, Wall Street lowered its ratings on the video streaming giant. This move also led to losses for other streaming competitors such as AT&T, Walt Disney and Roku.

Netflix (ticker: NFLX) stock fell 19.6% in premarket trading on Friday to $408.50 after the company posted underwhelming subscriber additions for the fourth quarter and issued first-quarter guidance that disappointed Wall Street expectations.

There were 8.28 million new subscribers for Netflix in the fourth quarter, a shortfall from its forecast of 8.5 million net subscriptions and closer to analyst expectations of 8.3 million. Netflix initially said it expected 2.5 million subscriber additions, a figure that fell way short of analysts’ 5.7 million forecast.

Analysts at Key Branc downgraded the stock from Overweight to Sector Weight. Key Branc doesn’t have a price target on Netflix shares.

Analyst Justin Patterson said Netflix “now screens as a low double-digit grower.” He also added that investors would focus on the degree paid net adds need to accelerate 2H to surpass 20 million.

Patterson added, in a research note, “Net, we see few catalysts.”

Netflix was cut from Outperform to Neutral by Credit Suisse, and its price target was reduced from $700 to $450. “New platform growth narratives have not emerged for Netflix before this sustained soft patch for net additions has driven a revenue deceleration from 24% growth in 2020 to 19% in 2022, to now an expected 13% in 2022,” Credit Suisse said in a research report.

Analysts at Evercore also downgraded Netflix from Outperform to In-Line and lowered their price target from $710 to $525.

Shares of AT&T (ticker: T) slipped 0.6% in premarket trading on Friday. In a report released by the company two weeks ago, it was stated that the telecommunications and media giant ended the fourth quarter with 73.8 million HBO max and HBO subscribers globally. An amazing performance that exceeded management expectations of 70 million to 73 million subscribers.

Shares of Disney (ticker: DIS), which owns the Disney+ streaming service, fell 3% to $143.21 in premarket trading. Roku (ROKU), a maker of streaming devices, dropped 4.5% to $159.77. Discovery (ticker: DISCA) fell 1.9%.