Netflix sell-off due to commentary on out-year margins, says Truist

Truist keeps a Hold rating and $485 price target on Netflix after the stock fell over 5% in yesterday’s session. The decline was due to the company’s commentary at an investor conference suggesting consensus out-years margin expectations may be aggressive, and the pullback on the name along with the “tapping of the breaks” on out-year expectations – which look full – is viewed as “favorably”, the analyst tells investors in a research note. Truist adds that while it is positive on Netflix password sharing efforts and advertising initiatives, the company’s end-market is hyper-competitive, with potential risk to out-years bullish consensus subscriber expectations.