Jefferies Assumes, Downgrades Netflix (NFLX) to Underperform

Jefferies assumes, downgraded Netflix (NASDAQ: NFLX) from Hold to Underperform with a price target of $80.00 (from $120.00).

Analyst John Janedis commented, "We are assuming coverage of NFLX with an Underperform rating and an $80 PT. Although NFLX's runway will span multiple years, our research suggests the domestic subscriber growth trajectory may be somewhat flatter than the market's current expectations. While Int'l will remain strong, we think the slowing U.S. market will pressure the stock's multiple."

On slowing U.S growth, the analyst commented, "Mgmt has guided to a LT target of 60-90M subs (from 47.9M paying subs, F16E). The low end of this range implies a BB home penetration rate of 52% (from 44% in '15) - well ahead of all peers. Given the platform's existing penetration rate, and the threat of building competition, we expect growth to moderate going forward (F20E: 58.3M paying subs)."

SI NOTE: This is the second downgrade in as many days.

For an analyst ratings summary and ratings history on Netflix click here. For more ratings news on Netflix click here.

Shares of Netflix closed at $97.91 yesterday.

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