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Barclays Pans Netflix While Rolling Out Internet Stock Ratings

NEW YORK (TheStreet) -- Barclays initiated coverage on eight large Internet stocks today, recommending shares of Facebook (FB), Google (GOOG) and Twitter (TWTR) while advising against owning Netflix (NFLX).

OPTIMISTIC OUTLOOK: Google is better positioned to benefit from emerging trends than "almost any other company," Barclays analyst Paul Vogel wrote. The company either dominates or is a major player in almost every major Internet theme, and its valuation is reasonable, leaving the shares well-positioned to advance further, the analyst wrote. He initiated the stock with a $650 price target and Overweight rating. Meanwhile, Facebook's user growth has been healthy and its engagement levels have continued to improve, while its execution has been strong, according to Vogel. The social media giant should benefit from a number of major trends - including social, mobile, identification and personalization - and its website has become habit forming, the analyst believes. He started coverage of the name with a $78 price target and Overweight rating. Twitter has become appealing to large groups of users, and the company can significantly expand its revenue as it incorporates new types of advertising into its platform, according to the analyst. He started coverage of the stock with a $46 price target and Overweight rating.

CAUTIOUS OUTLOOK: Netflix (FB) has a good product, but the stock's valuation is high and the company has lofty subscriber growth targets and faces a great deal of competition, the analyst believes. Moreover, the fees that Netflix has to pay to Internet Service Providers may rise significantly, the analyst warned. Netflix's stock is less attractive than the other Internet stocks the firm initiated today but is not likely to drop more than 5%, the analyst stated. He initiated coverage of the stock with a $420 price target and Underweight rating.

OTHER INITIATIONS: Vogel started coverage of LinkedIn (LNKD) with a $175 price target and Equal Weight rating, started coverage of eBay (EBAY) with a $54 price target and Equal Weight rating, initiated Yahoo (YHOO) with a $35 price target and Equal Weight rating, and started Amazon.com (AMZN) with a $330 price target and Equal Weight rating.

PRICE ACTION: In mid-morning trading, Google lost 0.5% to $583, Facebook was little changed at $67, Netflix fell 1% to $440, Twitter advanced 3% to $41, LinkedIn fell 1% to $169, eBay was little changed at $49, Yahoo rose 0.5% to $33.35, and Amazon fell 1% to $325.

Reporting by Larry Ramer.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

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