9-12-13 1:12 PM EDT | Email Article

By Rex Crum, MarketWatch


SAN FRANCISCO (MarketWatch) -- With Netflix Inc.'s share price more than tripling this year, the Internet video-streaming company has regained its status as a darling of investors.


But on Thursday, two Wall Street analysts said that based on the Netflix's (NFLX) recent programming successes and market gains, the company's more-than-$300-a-share stock price has, in effect, probably gone high enough.


BTIG Research analyst Richard Greenfield cut his rating on Netflix to neutral, from buy, while Scott Devitt, of Morgan Stanley, took down his view of Netflix to equal-weight, or neutral, from overweight, mostly due to valuation issues. Both analysts also removed their price targets on Netflix's stock.


Currently, of the 34 analysts the cover Netflix, 21 rated the stock neutral, seven maintain buy ratings and 6 have the stock at sell. Price targets range between $80 and $350 a share.


Following the downgrades, Netflix shares were trimmed by 1.7%, to trade at $302.85. Still, that price is 226% higher than the $92.59 point at which it started the year.


And on Thursday, Netflix made its debut all seven episodes of its newest original series, "Derek", starring and created by Ricky Gervais.


In a research note, BTIG's Greenfield said that Netflix "is becoming an increasingly appealing consumer proposition as wired [and] wireless bandwidth improves and we move toward a personalized entertainment world where everyone has their own device."


However, Greenfield said that "the only negative [with the company] is valuation, adding that Netflix's stock price is at a "reasonably" full level at the present time.


Morgan Stanley's Devitt had some of the same thoughts.


"We believe the fundamental mispricing of Netflix shares that has existed over the past 12 months has fully corrected," Devitt said, in a research note. Devitt said that investors are showing enough conviction in Netflix to suggest is can reach the 60 million to 90 million U.S. subscriber level seen by Chief Executive Reed Hastings.


But even with Devitt and Greenfield saying they feel Netflix is fully valued, other analysts still feel the company's shares have more room to go higher.


Barton Crockett, of Lazard Capital Markets, on Thursday raised his price target on Netflix to $350 a share from $325, saying that the company's recent original programming, and potential for more shows and subscriber growth, suggests the company's subscription business is "less risky".


Crockett also noted a deal Netflix made with Virgin Media for a pilot program to put Netflix on TiVo (TIVO) boxes in the United Kingdom as a sign Netflix is "encouraging evidence that perception of Netflix among [content] distributors is switching from foe to friend."

-Rex Crum; 415-439-6400; AskNewswires@dowjones.com


Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

09-12-13 1312ET

Copyright (c) 2013 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
Add a Comment

News   More...

Start Premium Trial Register For Free

P F Fund Financial Data (13,000+ funds)
P F Stock Financial Data (7,000+ stocks)
P F Stock and Fund Screeners (basic)
P F Investing Articles and Market Commentary
P F Articles Archive (>30 days)
P F Discuss (dozens of stock, fund, bond, and general bulletin boards)
P F Portfolio Manager (basic)
P F Morningstar Investment Classroom
P F Access Your Portfolio Anytime, Anywhere via Your Mobile Device
P   Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)
P   Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)
P   Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)
P   Portfolio Monitor (monthly and on-demand personalized portfolio statements)
P   Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)
P   Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters
P   Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)
P   Discounts on Morningstar newsletters, books, seminars, and more

Sign-up to Morningstar

Basic Access

Articles and Videos
Morningstar video reports, articles, data, and tools. Dig into our lineup of e-newsletters and investing classroom courses outlining sensible strategies for maximizing your investments.
Morningstar Discuss
Follow the buzz on individual stocks or fund families. Plus, read the latest posts from Morningstar members and analysts.
Portfolio Manager
Track your investments and watch lists with our Portfolio Manager. Customize your view with our comprehensive stock, fund, and ETF data.

Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.

Unlimited Access

Analyst Research
Gather in-depth, actionable insight on over 3,700 stock and mutual funds covered by Morningstar analysts. View our mutual fund Analyst Reports favored by professionals, savvy experienced investors, and new investors researching options for retirement savings, college plans, or other investment needs.
Portfolio X-Ray®
Ensure your portfolio is positioned exactly how you want with Morningstar's X-Ray Interpreter and Stock Intersection tools. A Barron's "Best of the Web" award winner for five years running, X-Ray Interpreter goes under the hood of your portfolio to provide a useful allocation, sector, and geographic analysis. And you can discover how much of a stock you really own, individually and through mutual funds, with Stock Intersection.
Investment Picks
Find new 5-star stocks (greatly undervalued companies) to consider daily. Our 5-star stock rating is a proven winner, consistently beating benchmarks like the S&P 500. Plus, browse our Fund Analyst Picks and Stewardship Grades to find shareholder-friendly mutual funds that are poised for outperformance.
Portfolio Monitor
Get a clear view of your investments with personalized reports about your portfolio. Receive monthly statements and generate reports on-demand to help you stay on track to meet your investment goals.

Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.

Content Partners
Morningstar - - As 'Derek' debuts, Netflix slips on downgrades
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Author |  Collection |  Interest |  Popularity

Previous: Arzbaecher to Retire as Actuant Corporation Chief Executive Officer January 2014; Goldstein Named as Successor  |  Next: As Awards Season Kicks Off with the People’s Choice Awards, Walgreens and P&G Offer Tips to Help Everyone Get Fabulous