Netflix is expected to release its Q3 results soon, but KeyBanc Capital Markets has warned that its upcoming earnings report may not have as much of an impact on its stock as some expect.

The streaming giant has been subject to fear from investors after the odds have stacked up against it. For example, growing competition from Disney+, Apple TV+ and other streaming services have led to factors such as its subscription pricing to be examined with more scrutiny. Furthermore, rising content costs and the outlook for international growth have also not acted in its favour.

According to KeyBanc analyst Andy Hargreaves, who examined Netflix ahead of its Q3 earnings report, there is potential for a large downside if Netflix misses out on any targets. According to Barrons, Hargreaves went on to say that the long-term outlook looks good for Netflix stock, but there would need to be more evidence of stability in terms of ‘investment efficiency’ or ‘strong elasticity around lower-priced plans’ for shares to become more positive.

He also acknowledged that competition from rivals with a lot of capital to invest, such as Walt Disney and Apple, will lead to investors playing close attention to these companies. This leads to Netflix stock overall becoming a source of scepticism for some, with two Netflix bulls recently lowering their price targets on it ahead of the Q3 earnings results.

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