Wedbush Downgrades Netflix (NFLX) to Neutral as Amazon (AMZN) Deal Now Seen as Unlikely
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Price: $79.59 -0.69%
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Wedbush downgraded shares of Netflix (NASDAQ: NFLX) to a Neutral rating from its previous rating of Outperform. The firm also cut its price target on shares of NFLX from $155 to $110.
Management's announcement today that the separation of the company's streaming and DVD businesses would no longer be happening. The firm notes that their earlier assumption that the split would allow Amazon (Nasdaq: AMZN) to purchase its streaming business is no longer possible.
An analyst at Wedbush comments, "given that the separation steps began in July 2011, Amazon likely agreed to a purchase price well above $200/share, with a large break-up fee in place. We believe Amazon could no longer justify a purchase price exceeding $200/share given Netflix’s current share price and likely additional customer attrition from the continuing backlash."
The firm is reiterating its 2011 and 2012 EPS estimates of $4.34 and $5.38. Revenue estimates for the two years remain at $3.252 billion and $4.583 billion.
For more ratings news on Netflix click here and for the rating history of Netflix click here.
Shares of Netflix closed at $117.21 yesterday.
Management's announcement today that the separation of the company's streaming and DVD businesses would no longer be happening. The firm notes that their earlier assumption that the split would allow Amazon (Nasdaq: AMZN) to purchase its streaming business is no longer possible.
An analyst at Wedbush comments, "given that the separation steps began in July 2011, Amazon likely agreed to a purchase price well above $200/share, with a large break-up fee in place. We believe Amazon could no longer justify a purchase price exceeding $200/share given Netflix’s current share price and likely additional customer attrition from the continuing backlash."
The firm is reiterating its 2011 and 2012 EPS estimates of $4.34 and $5.38. Revenue estimates for the two years remain at $3.252 billion and $4.583 billion.
For more ratings news on Netflix click here and for the rating history of Netflix click here.
Shares of Netflix closed at $117.21 yesterday.
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