By Angela Palumbo

Netflix stock has been a solid outperformer this year, but concerns about film tariffs have given investors pause.

President Donald Trump announced Sunday that he was authorizing the Department of Commerce and U.S. Trade Representative to begin the process of instituting a 100% tariff on movies coming into the country "that are produced in Foreign Lands."

Citi analyst Jason Bazinet wrote in a research note on Tuesday that Netflix "has been viewed by investors as a 'safe haven' with respect to tariffs."

That safe haven is at risk now following Trump's announcement, and Bazinet wrote the worst case scenario for Netflix would be if the 100% tariff on content produced outside of the U.S. was implemented.

"We estimate 50% of content produced by Netflix is created outside the US," Bazinet wrote. "With a 100% tariff, we estimate this could reduce EPS by around $6 per share."

Bazinet, who rates Netflix as Neutral with $1,020 price target, wrote that he believes Netflix will do all it can to mitigate the tariff impacts, which could include shifting production to the U.S., restricting U.S. access to content produced outside the country, and raising prices.

There's still a lot of uncertainty around what these tariffs will actually look like.

Raymond James analyst Andrew Marok wrote on Tuesday the impact to entertainment companies "is subject to a vast number of variable terms, including the decision to actually implement the tariff or not, the timing of implementation, and any potential exceptions negotiated by companies or countries."

Netflix declined to respond to a Barron's request for comment Tuesday.

Although stocks have taken a hit over tariff worries, Netflix shares have gained 28% this year, compared with the 4.4% decline in the S&P 500.

Shares dropped 1.9% on Monday, however, which was the stock's first day closing in the red since April 16. Netflix stock was up 0.8% in midday trading Tuesday.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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May 06, 2025 13:09 ET (17:09 GMT)

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