Janney Montgomery Scott Downgrades Netflix (NFLX) to Sell, Citing Mounting Headwinds

Janney Montgomery Scott downgraded Netflix (NASDAQ: NFLX) from Hold to Sell, saying it will be increasingly more difficult to support its high valuation in the face of headwinds tied to Usage Based billing, a deceleration in sub growth, and an increase in competition that will likely trigger an increase in content cost and SAC.

Janney Montgomery is also troubled by the company's streaming cost accounting and its limiting of disclosures in this increasingly volatile environment.

The firm cut their price target from $175 to $170.

Headwinds for Netflix the firm cited include: 1) Usage Based Billion; 2) competition; 3) SAC pressure; 4) content cost accounting; 5) the deceleration of US sub growth; 6) rising content costs; and 7) the limiting of key disclosures.

For more ratings news on Netflix click here and for the rating history of Netflix click here.

Shares of Netflix closed at $251.67 yesterday.

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