Netflix (NFLX) PT Slashed to $345 at Piper Jaffray; Priced for Perfection But Not Perfect
Piper Jaffray analyst Michael Olson slashed his price target on Netflix (NASDAQ: NFLX) to $345.00 (from $434.00) while maintaining a Neutral rating as sub momentum slows.
Olson commented, "NFLX was priced for perfection, anticipating strong domestic sub add momentum, pricing power, rapid international uptake, and upside to profitability forecasts. The Q3 domestic sub miss has investors concerned about early signs of saturation and the negative impact of the recent price increase. Despite launching in 6 European countries in Sept, international subs were also slightly below consensus, potentially planting seeds of doubt that international roll-outs will not progress as hoped. Meanwhile, the company's Q4 EPS guidance and LT qualitative commentary both suggest the launch of Netflix in new countries will likely result in lower profitability than was assumed in consensus forecasts. While Netflix should continue to invest by adding content and launching in new countries, investors may be unwilling to jump into the stock without seeing evidence that domestic saturation and slower international ramp will not be persistent issues."
The firm cut FY 2014 EPS from $4.00 to $3.43 and FY 2015 EPS from $7.22 to $5.75.
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Shares of Netflix closed at $448.59 yesterday.