Drop in Netflix’s target price
According to a StreetInsider report on July 19, Netflix was downgraded by Jefferies from “hold” to “underperform,” and the company’s target price was slashed from $80 to $76. The report cited Jefferies analyst John Janedis, who stated, “Management highlighted that the onset of the ‘un-grandfathering’ process in April contributed to lighter-than-expected global sub adds for 2Q / guidance for 3Q. As this process continues through 3Q into 4Q, we expect the uptick in churn could build and maintain our UP rating / lower our PT to $76 (from $).”
On July 22, 2016, Netflix’s (NFLX) stock price closed at $85.89. The company’s stock price has fallen 26.4% YTD (year-to-date) and 12.7% since the company’s fiscal 2Q16 earnings were announced. In contrast, media companies Comcast (CMCSA) and 21st Century Fox (FOXA) have seen their stock prices rise 19% and fall 0.7%, respectively, on a YTD basis. The Walt Disney Company’s (DIS) stock price has fallen 8.1% YTD.
In this series
In this series, we’ll look at the steps Netflix has undertaken in the domestic market to shore up its US subscribers and discuss whether these steps will be sufficient. We’ll also look at the factors that could impact Netflix in the domestic and international markets and the company’s technical indicators.
We’ll begin by looking at analysts’ recommendations and target prices for Netflix in the next part of this series.