People Are Spending More Time Outdoors, Which Will Hurt Netflix (NFLX) This Quarter - KeyBanc
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KeyBanc analyst Justin Patterson said data suggests Netflix (NASDAQ: NFLX) is tracking below the firm's and Street second-quarter net subscriber additions estimates of 0.8M/1.0M.
While disappointing, Patterson said this appears to be more of a gross add issue than churn. This is being attributed to 1) a lighter content slate and 2) more time spent outdoors.
The analyst said while the dynamic could lead to soft net add guidance for 3Q, the good news is that gross adds is a solvable problem and they see "light at the end of the tunnel with the return ofMoney Heist (3Q and 4Q) and Witcher (est. 4Q)."
"As net add trends normalize, we believe investors will focus on NFLX's 30%+ EPS growth, reasonable valuation, and favorable risk/reward," Patterson added.
The analyst reiterated an Overweight rating and $650.00 price target on NLFX.
Shares of Netflix closed at $492.41 yesterday.
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