Dawson James Slashes Price Target on Netflix (NFLX), No Good News, Only Bad
Tweet Send to a FriendGet Alerts NFLX Hot Sheet
Price: $239.00 +0.83%
Rating Summary:
15 Buy, 18 Hold, 10 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
15 Buy, 18 Hold, 10 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade NFLX Now!
Dawson James is reaffirming its Sell rating on shares of Netflix (NASDAQ: NFLX) and is cutting its price target from $181 to $115 following the company's new outlook.
The company is only anticipating on having 24 million subscribers for the third quarter, down 1 million subscribers from its previous estimate and down 2 percent from the previous quarter.
The firm notes that management originally under estimated the the amount of subscriber cancellations and customer backlash resulting from their price increases. The pricing combined with the discontinuation of Starz (Nasdaq: LSTZA), which will result in the loss of movies from Disney (NYSE: DIS) and Sony (NYSE: SNE), will be significantly detrimental to the company's streaming catalog.
An analyst at Dawson James comments, "We believe that Starz’s insistence that Netflix adopt a new tiered pricing strategy demonstrates that cable cord cutting is becoming a serious threat to content producers. We anticipate that other content producers will adopt policies similar to Starz’s to protect existing revenue streams such as television advertising, premium cable subscriptions, and DVD sales."
Dawson James currently estimates EPS of $0.70 for Q3 and $3.88 for the fiscal year. Revenue for the quarter is expected to be $810 million and $3.22 billion for the year.
For more ratings news on Netflix click here and for the rating history of Netflix click here.
Shares of Netflix closed at $169.25 yesterday, with a 52 week range of $140.02-$304.79.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
The company is only anticipating on having 24 million subscribers for the third quarter, down 1 million subscribers from its previous estimate and down 2 percent from the previous quarter.
The firm notes that management originally under estimated the the amount of subscriber cancellations and customer backlash resulting from their price increases. The pricing combined with the discontinuation of Starz (Nasdaq: LSTZA), which will result in the loss of movies from Disney (NYSE: DIS) and Sony (NYSE: SNE), will be significantly detrimental to the company's streaming catalog.
An analyst at Dawson James comments, "We believe that Starz’s insistence that Netflix adopt a new tiered pricing strategy demonstrates that cable cord cutting is becoming a serious threat to content producers. We anticipate that other content producers will adopt policies similar to Starz’s to protect existing revenue streams such as television advertising, premium cable subscriptions, and DVD sales."
Dawson James currently estimates EPS of $0.70 for Q3 and $3.88 for the fiscal year. Revenue for the quarter is expected to be $810 million and $3.22 billion for the year.
For more ratings news on Netflix click here and for the rating history of Netflix click here.
Shares of Netflix closed at $169.25 yesterday, with a 52 week range of $140.02-$304.79.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- Morgan Stanley Says Tesla (TSLA) 'Top Pick in U.S. Autos'
- Deutsche Bank Takes Aegerion (AEGR) Price Target from $52 to $85
- Needham & Company Remains on Sidelines wth Applied Materials (AMAT) Post Q2
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Raising Prices
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
