Netflix Under Pressure as Warner Discovery Deal Faces Regulatory Hurdles

Netflix’s stock has been under heavy selling pressure, carving out a fresh 52-week low on Friday as investors weigh the ongoing regulatory scrutiny surrounding the planned Warner Bros. Discovery acquisition. The shares traded around $76.88, and from the June 2025 peak they have fallen about 42%.

The looming drag on the stock is the Warner Bros. Discovery deal, which is valued at $82.7 billion. Market participants remain jittery over the stringent regulatory checks and the extended timeline expected to the deal’s close in the third quarter of 2026.

Beyond regulatory uncertainty, investors worry about the operational risks tied to melding two enormous content libraries. The complexity of integrating such vast catalogs has attracted attention from competitors, with reports of potential interest from Paramount adding further volatility to the mix.

Even as the chart paints a bleak picture, Netflix’s core business shows strength. In the most recent quarter reported on January 20, revenue rose 17.6% year over year to $12.05 billion. Earnings per share stood at $0.56, topping consensus estimates. Additionally, gross margins and customer retention run ahead of the industry average.

Should investors sell immediately? Or is it worth buying Netflix?

This creates a pronounced disconnect between market sentiment and professional outlooks. Market strategists gauge the stock’s fair value well above current levels, with an average price target of $119. That implies upside potential of roughly 55% if the merger project is successfully navigated.

The Focus Remains on Content and Subscribers

Operational momentum persists despite the deal-driven overhang. Netflix continues to push its content calendar, releasing How to Get to Heaven from Belfast and preparing the third season of The Night Agent, scheduled to premiere on February 19, as part of efforts to keep subscriber engagement high.

Looking ahead, investors will be eyeing the next quarterly report, which is expected on April 16, 2026. Until then, price action is likely to hinge more on regulatory developments surrounding the Warner deal than on user metrics.