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
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(END) Dow Jones Newswires
09-12-13 1312ETCopyright (c) 2013 Dow Jones & Company, Inc.
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