Benchmark analyst Matthew Harrigan reiterated his sell rating on Netflix Inc. stock
NFLX,
on Tuesday and $412 stock price target, saying he doesn’t expect any upside surprises for member growth in the fourth quarter or 2021. “This is albeit with international sales and operating profit translation benefiting from ongoing U.S. dollar weakness,” Harrigan wrote in a note to clients. “Netflix’s trading correlation with other prominent Nasdaq 100 and FAAMG names has now clearly broken down as 1) confidence in its streaming exceptionalism is fading somewhat even as 2) the stay-at-home trade may be “very 2020″ even with some concern over how U.K. and South African virus mutations could affect COVID-19 vaccine efficacy.” He noted that Netflix stock is down about 1% since its second-quarter earnings release, compared with a record 19.5% gain for the Nasdaq 100. Netflix Inc. reported a dramatic slowdown in new subscribers in the third quarter and widely missed earnings expectations, adding just 2.2 million new subscribers, after two straight quarters of more than 10 million. The streaming giant is also facing heightened competition from successful new competitors, including Disney+, from Walt Disney Co.
DIS,
Netflix shares were up 0.4% premarket and have gained 60.4% in the last 12 months, while the S&P 500
SPX,
has gained 14%.
