Oh, poor Netflix (NASDAQ:NFLX). It’s the crash on Wall Street that makes all of us slow down and rubberneck.
But lest you think this company is a bargain after its horrible 2011 and its recent strength, consider that even the sycophants on Wall Street know better than to talk up this disaster. Factset tallies 28% of the analysts covering Netflix have a sell recommendation vs. just 14% on the buy side. Out of a 23 experts tracked by Thomson/First Call, the mean price target is $90.60 — basically right where NFLX is now — and the median is $80.
But some of those targets are stale, from months ago. What are folks saying lately? Well, the latest recommendation was from Canaccord Genuity, which reiterated its sell recommendation on Nov. 29 and revised its already ugly target of $60 a share down even lower to a mere $57.
The lowest target for NFLX? Just $45.
More telling is that the investment bankers appear to be putting their money where their mouth is. As of Dec. 15, short interest in Netflix was about 20% of the available stock, with 9.9 million shares held on the downside. That was down slightly from 10.9 million the prior month, but clearly the bears are still sharpening their claws on this fallen entertainment stock.
Folks may think that the worst is over for Netflix, but even Wall Street fat cats appear to think more money can be made on the downside. Traders should take heed and short Netflix — and bottom feeders should look elsewhere.