Crest View International Comments As Netflix Stock Drops
Drop in new subscribers comes as shock notes Crest View International
Crest View International researchers noted that analysts from around the world were blindsided by a surprise drop in new subscribers to Netflix Inc (NFLX.O), many analysts slashed their price targets on the video-streaming company as it shed a fifth of its value on Thursday reported Crest View International.
Analysts from Crest View International say that their advice came too late for investors who had followed the recent “buy” guidance of at least 20 brokerages – not least BTIG Research, which upgraded the stock just two days before Netflix reported third-quarter results.
A one-year price target of $600 on a stock that was trading on Thursday afternoon at $362.45, down 19 percent. It said it’s Oct. 13 upgrade “could not have been more poorly timed in hindsight.”
But, like many others, BTIG is betting on the long-term results of an expensive push by Netflix into original content and more international markets.
Netflix, with original shows that include “House of Cards” and “Orange is the New Black”, plans to spend $8.9 billion on acquiring new content in the next few years.
With more than a quarter of its 53 million customers now outside the United States, the company is also looking to expand its international business to reach new viewers and increase its buying clout with content providers.
BTIG is far from alone in forecasting growth for a company that is financing four Adam Sandler movies and making the sequel to martial-arts drama “Crouching Tiger, Hidden Dragon.”
In a little over a month, Barclays, RBC and Cowen & Co have each raised their price targets. Canaccord Genuity began coverage in September with a “buy” rating and $550 price target.
But that was before Netflix announced 3.02 million new streaming customers in the quarter ended September, well below its own forecast of 3.69 million.
“In a market where Netflix is a pioneer, competition is also emerging.” Commented Michael Kennedy, Head of Corporate Trading at Crest View International.
CBS Corp CBS.N announced plans to launch subscription-based video-on-demand and live streaming for its TV network just a day after Time Warner Inc TWX.N said its HBO channel would launch an online streaming service next year.