By Dan Gallagher

Wall Street sees President Trump's "Hollywood Tariffs" as unlikely. But Netflix wasn't even priced for the possibility.

The streaming giant's share price was down a little over 1% by Monday afternoon. That's an improvement over the stock's 4% drop around the day's opening bell, which followed Trump announcing a plan for 100% tariffs "on any and all Movies coming into our Country that are produced in Foreign Lands." The announcement hit movie stocks across the board.

Trump's announcement-made over his Truth Social network-was scant on details. But some analysts so far are skeptical. "We think the Trump administration will face tremendous pushback," wrote Michael Pachter of Wedbush in a note to clients. Doug Creutz of TD Cowen described the tariffs as "politically charged, logistically challenging, and ultimately unlikely to advance meaningfully" in his own report.

But unlike traditional media stocks that have mostly been in a slump this year, Netflix shares have been flying high. The stock was mostly unscathed by Trump's initial tariff announcements in early April, due to the belief that subscription-based streaming services like Netflix and Spotify would be largely immune to the effects of such measures. Netflix shares also got an additional boost from a strong first-quarter report on April 17.

All told, Netflix was up 30% for the year by the end of last week, compared to a 4% drop for the S&P 500 Media & Entertainment Group. That run had put Netflix shares to a multiple of about 42 times projected earnings-40% higher than what the stock was fetching a year ago and nearly triple Disney's multiple.

In a report Monday, Jason Bazinet of Citigroup estimated a "worst-case" of about $3 billion a year in additional costs to Netflix from the tariffs Trump outlined, but added that the company "has a range of options at its disposal to limit the impact." Still, he noted that the idea of Netflix as a "safe haven" from tariffs is now under threat. Even safe havens have their price.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here.

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May 05, 2025 15:44 ET (19:44 GMT)

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