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Netflix, Inc. Message Board

  • telecom_funds telecom_funds Jan 18, 2013 5:24 PM Flag

    AAPL, the company that puts fear in every nflx long.............

    As noted in 7 Gut Checks, Janney Capital’s Tony Wible has turned positive on Netflix NFLX -0.01% , after years of being a bear on the stock. Wible put a buy on the stock with a fair value of $127, citing the Disney distribution deal and potential for something with Sony as drivers.

    Rich Tullo, director of research at Albert Fried & Co. seems to think that scenario is just a fairy tale.

    “We think the recent rally based on I) the Disney Deal II) M&A hopes and III) Short profit taking prior to an increase in expected capital gains tax rates could be setting up speculators yet again. We think a Reflexive Speculative bubble has developed in NFLX shares,” Tullo wrote in an extensive note Friday.

    He notes that the benefits of the chance to stream Disney content don’t kick in until 2016, Netflix already streams content that targets Disney’s strongest audiences, and Netflix may end up underwriting Disney’s expenses for flops like “John Carter” and “The Alamo.”

    Tullo also sees a big threat to Netflix from Apple AAPL +0.01% .

    “We think Apple may enter the next generation TV market with a large Panel Retina Display Supported by iCloud. If Apple roles out a next generation TV it is likely Apple will support the product with the iCloud its natural match in our view. We think Apple could disrupt NFLX and get industry buying and make the current exclusive rights streaming rights controlled by NFLX useless.”

    Tullo put a sell on Netflix with a $68 price target.

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