On Tuesday, Wall Street bank Morgan Stanley (MS) cut its rating for Netflix (NFLX) stock from “equal-weight” to “underweight.”
Morgan Stanley also trimmed its price target for NFLX stock from $333 a share to $310 a share. The bank’s lead analyst Scott Devitt says that despite recent gains for NFLX, the service is facing rising challenges from rival streaming services like Hulu, Amazon (AMZN) Prime and Time Warner’s (TWX) HBO GO, Forbes notes.
Devitt notes that Amazon and HBO have not yet fully converted their user base into streaming content subscribers, making it easier for them to boost total subscriber numbers compared to NFLX.
He also notes that Hulu offers more TV content relative to NFLX, especially for current shows. That makes Hulu a more likely choice for people opting to cut the cable cord. Meanwhile, HBO GO has a broader array of popular movie titles than NFLX.
NFXL shares tripled in 2013 as the company recovered from missteps in the prior year. NFLX shares gained almost 2% in Wednesday mid-day trading, despite the Morgan Stanley downgrade.
By contrast, MS stock edged up slightly in Wednesday trading.