Netflix: Stifel Downgrades To “Hold” On Valuation

Stifel Nicolaus analyst Scott Devitt has cut his rating on Netflix (NFLX) to Hold from Buy on a valuation basis. He notes that the stock has rallied 33% since late October, versus a 3% drop in the Nasdaq. The stock has moved above his $25 target price. “On a longer-term basis,” he writes, “Netflix continues to face a threat that the shift to digital distribution could change its direct competitor set from Blockbuster to Amazon, Apple, Cisco, Comcast, Verizon , etc. We believe Netflix management team has positioned the company well for the eventual transition toward digital; nonetheless, having a legacy physical infrastructure and a very well-capitalized and aggressive new competitor set in digital could make NFLX’s longer-term prospects more uncertain.” On Friday, Netflix rose $2.10, or 9.1%, to $25.27. (link)