Netflix Stock Downgraded After Monster Run

Stifel lowered its rating on NFLX, citing valuation concerns

Mar 7, 2018 at 9:34 AM
facebook twitter linkedin

Shares of Netflix, Inc. (NASDAQ:NFLX) are trading down 1.7% at $319.71 after Stifel downgraded the FAANG stock to "hold" from "buy." The brokerage firm also raised its price target to $325 from $283, saying it is still optimistic on the company's competitive advantage, but it believes the short-term share price has grown faster than fundamentals.

Stifel's new NFLX price target is in line with last night's record close at $325.22, with the shares topping out at an all-time intraday peak of $325.79 earlier in the session. This positive price action is just more of the same, though, with the security up 69.4% year-to-date heading into today's trading -- the best S&P 500 Index (SPX) stock so far this year.

As such, the shares may have been due for a short-term pullback, considering their 14-day Relative Strength Index (RSI) settled Tuesday at 80. In other words, Netflix was overbought coming into today.

And despite Netflix stock's long-term technical strength, there's an ample amount of skepticism still priced in -- which could create tailwinds for the shares on a potential unwind. In fact, nearly two-fifths of analysts covering NFLX stock maintain a "hold" or "sell" rating, while the average 12-month price target of $273.23 sits at a discount to current trading levels.

Those looking to bet on a Netflix bounce may want to consider doing so with options. The stock's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 86 (out of a possible 100), meaning NFLX has consistently outperformed options traders expectations -- a potential boon to premium buyers.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners