Bullish Greenback and surging interest rates steamroll Netflix’s price target.   


16 October 2018 : Courtesy the “in-vogue” trends like King Dollar on the rise and surging interest rates, Morgan Stanley slashed its 12-month price target for Netflix, right before earnings. 


This is the third firm on the Wall street to do so. Just yesterday, Goldman Sachs and Raymond James both cut the streaming giant’s price targets.


According to analyst Benjamin Swinburne at Morgan Stanley "Longer term, we expect Netflix will continue to invest and market behind its ramping global original programming and we raise long-term marketing expenses [as a percent] of revenues by ~100 [basis points versus our] prior forecast.We also raise the incremental cost of debt based on rising interest rates, with Netflix still needing to raise an additional ~$5 [billion] of debt over the next two years before reaching positive free cash flow in 2021."


The revised price target for the stock is now $450 a share plummeted from $480 a share.


Resilient to the cut, Netflix shares surged by 1.2% in premarket trading to $338.69. Although, the stock did decline by 1.9% on Monday and is coming off a 6.1% drop last week, as technology stocks were thrashed amidst a broader market sell-off fueled by concerns over sky-rocketing interest rates, escalating trade tensions and tighter monetary policy.


On the other hand, Deutsche Bank has high expectations from Netflix and believed that the streaming giant will give a "better than expected" forecast for the fourth quarter. According to the Deutsche's Bryan Kraft “ The risk/reward skews to the upside going into this earnings report.That said, we think the upside is limited in the short term.” . Deutsche Bank has a $350 a share price target on Netflix.


Reporting for EasyKobo on Tuesday ,16 October 2018 in Lagos, Nigeria


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