Netflix (NFLX) Stock Price Target Cut at MKM Partners
NEW YORK (TheStreet) -- Netflix (NFLX) - Get Report stock price target was cut to $130 from $145 at MKM Partners this morning.
The price decrease comes after the Los Gatos, CA-based film and TV streaming service reported lower than expected subscriber numbers for the fiscal 2016 second quarter after raising its prices for subscriptions.
Since the total subscriber miss was just 1% of the subscriber base, MKM said to avoid "drawing conclusion from such a small portion of a very large and diverse base."
While the firm, which has a "buy" rating on shares, is lowering near-and-longer-term subscriber numbers, it remains confident in the stock.
"We expect the shares to remain under pressure in the near-term but think this is a transitory issue and will prove to be an excellent buying opportunity," MKM said.
The firm estimates that domestic subscribers will grow to 66 million by 2021 vs. 69 million previously, and international will grow to 103 million vs. 110 million previously.
Shares of Netflix are up 0.91% to $86.62 in pre-market trading after plunging on Tuesday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NETFLIX INC as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
You can view the full analysis from the report here: NFLX
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