Netflix Stock Set to Slide Despite Bullish Barclays Note

Options sentiment has been bearish of late

by Emma Duncan

Published on Mar 28, 2018 at 9:14 AM
Updated on Mar 28, 2018 at 9:16 AM

Shares of Netflix, Inc. (NASDAQ:NFLX) are in focus after the stock received a price-target hike at Barclays to $335 from $285 early this morning. This vote of confidence comes after yesterday's tech-sector sell-off which sent NFLX shares to their lowest close since March 1. Still, the security is pointed 3.7% lower in pre-market trading, set to open at $297.49 -- just below Citron Research's price target.

Looking broader, the FAANG stock has had a great year, gaining 108% over the past 12 months, touching a record high of $333.98 on March 12. Still, 14 covering analysts rate the equity a "hold" or "strong sell," and the average 12-month price target sits down at $284.05.

In the options pits, sentiment has been more bearish than normal, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing NFLX with a 10-day put/call volume ratio of 0.80, ranking in the 72nd percentile of its annual range. This shows that during the past two weeks, puts have been purchased over calls at a faster-than-usual clip.

On the volatility front, the stock has a Schaeffer's Volatility Scorecard (SVS) of 88. This shows NFLX has tended to make outsized moves over the last 12 months, relative to what the options market has expected.


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