Nothing goes up forever. That seems to be the takeaway that Loop Capital analysts want to get out about streaming giant Netflix (NFLX) as it offered up a cut to the rating. However, it also hiked the price target, suggesting that there may still be some gains, even if the pace slows. Investors did not seem to mind, though, as shares notched up fractionally in Monday afternoon’s trading.
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Loop Capital analysts dropped Netflix stock from a Buy to a Hold but, at the same time, boosted the price target from $800 to $950 per share. With the stock currently trading around its 52-week high of $941.75 and posting returns that nearly doubled in the last year, there had to be a limit somewhere.
Loop Capital analysts then noted that a lot of the factors that gave Netflix its shocking gains—the shift to ad-supported television, the membership crackdown, a substantial library that got Netflix through strikes without incident, and so on—have largely been priced in already. But there is a lot less that seems to be coming out in the future, and that will keep Netflix shares close to where they already are.
Emerging Content Support
While Netflix likely does not have any ground-shaking structural events to boost it, it will still offer some gains in its content offerings. For those who enjoyed Netflix’s Man Vs. Bee, featuring legendary British comic Rowan Atkinson, you will be happy to note that he will be coming back to the platform for another comic mismatch in Man Vs. Baby. The premise will be largely the same—Trevor Bingley will be looking after a London penthouse this time—but now, a baby is involved instead of a bee.
As for the upcoming premiere of WWE Raw on Netflix, speculation is already rampant about what wrestling names will make an appearance at the premiere. Not only is John Cena expected to show up for the start of his retirement tour—jokes about being unable to see him aside—but so too will Randy Orton, Rikishi, The Rock, and The Undertaker.
Is Netflix Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 24 Buys, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After an 89% rally in its share price over the past year, the average NFLX price target of $839.55 per share implies 8.94% downside risk.
