(Reuters) – Wall Street brokerages stuck to a positive outlook on Netflix Inc on Thursday, betting that a strong content slate for the rest of 2019 would reverse shock losses in U.S. subscribers in the second quarter that sank its stock price.
Shares in the company fell 11% in early trade, as investors worried over lower-than-expected global growth and signs of trouble in its U.S. base.
Brokerages - Share - Price - Targets - Dip
Six brokerages cut their share price targets to reflect the dip in the shares, but there were no cuts to their ratings on the stock, still seen by a majority of Wall Street firms as a high-potential growth business and a clear “buy”.
The company added just 2.83 million international paid streaming subscribers, compared with street expectations of 4.8 million. Brokers Cowen & Co calculated it had missed expectations for second-quarter subscriber numbers three times in the last four years.
Subscriber - Miss - Magnitude - RBC - Capital
“The subscriber miss wasn’t unprecedented, though the international miss magnitude was greater than normal,” RBC Capital Markets analysts said.
“But Q2 results do highlight the importance of a strong content slate and at least raise the question of whether NFLX needs to be more restrained with price increase pacing.”
Netflix - Customers - Prices
Netflix, which has 151.6 million customers, raised prices...
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