Netflix Analyst Trifecta Cuts (NFLX, AMZN, BBI)
May 14, 2010 by Jon C. Ogg
Netflix, Inc. (NASDAQ: NFLX) had been on another tear but a UBS downgrade from Neutral to ‘Sell’ yesterday refuted a WSJ story that Netflix could be a possible takeover target for Amazon.com Inc. (NASDAQ: AMZN). And now we have seen two more analyst downgrades this morning taking even more juice out of this cocktail.
It was just yesterday that shares hit a new 52-week and all-time high of $119.50, but shares closed down at $110.01 on the intra-day downgrade.
Citigroup cut Netflix down to a “Hold” from Buy due to target price and valuation (target $110). Merriman Curhan Ford cut the rating to Neutral from Buy on the same reasoning this morning.
Blockbuster Inc. (NYSE: BBI) earnings were a disaster and shares are down 21% at $0.39 in trading this morning. Our own take is that if Amazon.com really wanted to buy Netflix it should have done so last summer. A Netflix acquisition would only be combining two high valuation and premium multiple stocks even if it would add in a solid business that could easily be consolidated in the Amazon network.
Netflix shares are trading down 4.78% at $104.75 on the two analyst downgrades this morning. At 9:25 AM EST we have seen only about 45,000 shares trade hands.
JON C. OGG
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