Netflix hits one-week low after Bernstein downgrade


Netflix Inc. (NASDAQ:NFLX), the subscription video-streaming service, fell to the lowest intraday price in more than a week after Stanford Bernstein downgraded the stock.

The shares dropped 3.7 percent to $207.56, the lowest intraday price since June 13, before trading at $208.50, down 3.3 percent, at 10:46 a.m. in New York on Tuesday. The shares stretched losses for a fourth day in a row.

Bernstein lowered Netflix to "underperform" from "market perform", saying current valuation reflects "unrealistic expectations".

“We believe Netflix will grow its subs, expand its margins and be able to replicate its business internationally. However, we also believe its current valuation reflects unrealistic expectations across all major economic levers of the business,” Bernstein analysts Carlos Kirjner and Ram Parameswaran wrote in a note to clients.

The analysts set a new price target of $180 from an old target of $125. 

The current stock price reflects at least 50 million streaming subscribers in the U.S. in a year while Bernstein analysts predict the number of domestic subscribers to rise to just 43 million in a year in a steady state. 

"We think the limits imposed by the actual size of Netflix's truly addressable domestic market, growing competition, and diminishing returns on incremental content investment will become clear in 2014," the analysts wrote.

Netflix shares have gained 128 percent since the beginning of the year through Monday, outpacing a 10 percent gain by the Nasdaq Composite (INDEXNASDAQ:.IXIC).

The current consensus among 36 analysts is to “hold” the stock.





Quick facts: Netflix

Price: 482.88 USD

Market: NASDAQ
Market Cap: $212.96 billion

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...


Cabral Gold adds 2nd drill rig as company identifies new high-grade veins

Cabral Gold (CVE: CBR-OTC: CBGZF) CEO Alan Carter joined Steve Darling from Proactive Vancouver with news the company has identified at least six new NE trending high-grade veins in the Machichie SW area located immediately north of the MG deposit. Carter telling Proactive what had led them...

2 days, 6 hours ago

2 min read