Netflix – Downgrade is Questionable

Netflix, a leading video streaming service, had its shares downgraded by an analyst. What’s surprising is the downgrade happened when positive tailwinds can save the day. Laura Martin, a Needham analyst, downgraded the stocks of the premium video platform on Tuesday as she argued that the United Kingdom’s Brexit referendum vote could weigh on the growth of subscriptions for the service throughout Europe.

Netflix - Downgrade is Questionable

Netflix Stocks Have Been Downgraded Due to Brexit

Even though Netflix stocks may have opened lower because of the downgrade, as Needham’s rating is going from Buy which is now Hold, the negativity did not last. Just after a few hours within the trading day, the shares have broken through the $100 ceiling. This was also the first time that the video platform’s stock traded within the triple digits in almost a month.

Shares of Netflix moved up higher after Recode confirmed that the premium video streaming service is now teaming up with Comcast in order to offer Comcast cable television subscribers a direct access to streaming videos within the platform. This is expected to take place within later this year and it will happen through its X1 set-top box platform.

The good news does not end here as less than an hour after Recode had broken the news about the Comcast agreement and partnership, the premium video platform had announced that it will be entering into a multi-year licensing deal with CW network. This network, which is a joint venture of Time Warner and CBS, will continue offering earlier seasons of its scripted shows that are aired exclusively within the United States market through the video streaming service.

There are those that speculate that Martin may have figure she was timing her move pertaining to the downgrade just right. Stocks for the video platform had risen for four consecutive trading days following the downgrade that took place on Tuesday. Furthermore, the streak does not end there as shares have now risen by 15-percent within the past five trading days.

Netflix is playing nice with Time Warner, CBS, and Comcast, and this is by no means an easy feat since these three companies have all the reasons for seeing the video streaming service as a disrupter. For one, Comcast is the leading cable provider in the country, but there are many who are turning into wireless video streaming because of a more uncluttered solution than cable TV. Furthermore, Comcast has steep monthly bills as compared to streaming videos through the subscription service.


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