Caris & Co. analyst David Miller thinks the worst could be over for Netflix's (Nasdaq: NFLX) slip-sliding stock and has thus upgraded his opinion of it appropriately.
Netflix closed Tuesday at $65.60, up $1.36. Of course, the stock did hit close to $305 in July 2011, just before Netflix raised its prices for Internet streaming video and DVD-by-mail rentals. Things continued to slide down last month when Netflix announced second-quarter earnings that included a return to profitability but still included a 91 percent drop in net income, mediocre subscriber gains and a caution that things could be muddled in the third quarter because viewers might drift away to watch the London Summer Olympics. That news caused the stock to fall off the cliff, dropping $13.39 to $67.
Netflix has also been slammed by increasingly high costs for content from movie and TV studios as well as expansion plans outside the U.S. The video purveyor this week said it hit the million subscriber mark in the U.K. and Ireland, putting out that news after previously saying it would launch service in Scandinavia later this year.
Still, according to an Associated Press story, Miller thinks things will get better. He specifically pointed to a Netflix deal with Epix where the online video purveyor will get a reduced price on content for the next three years if it surrenders exclusivity rights and lets Epix sell the content to others.
Miller, according to a research note covered by the AP, said he expects the Netflix stock to deliver "average" returns, an upgrade from the "below average" rating he'd had in place for the past 11 months.
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