Netflix, Inc. (NASDAQ:NFLX) was racing in midday trading against the current of a reversing market, with the bulls clinging to a buy-call reiteration on NFLX stock from analysts at Piper Jaffray.
Specifically, Piper reiterated its “Overweight” rating on Netflix shares, which include a $166 price target– some 15% higher from current prices. The impetus? The results of the 33rd semi-annual Taking Stock With Teens survey, which showed an upward trend in Netflix’s popularity among teens.
The question was, “What percent of your time do you spend watching video across these platforms?” Teens reported an average of 38% of their time spent on Netflix, versus 37% six months ago.
We’ll see whether a new ratings system does anything to buoy that figure in a few weeks. Netflix this month has launched a new rating system that uses “thumbs up” and “thumbs down” as indicators, moving away from the star methodology. Netflix itself seems a bit worried about the launch, going so far as to release a video explaining the new ratings system to viewers.
NFLX ditched the old system because it ended up moreso reflecting popularity rather than its ability to predict what viewers might want to watch.
NFLX stock started Monday’s trading in the red, but reversed hard amid news of the upgrade and is now well in the black. The bounce is coming off support at the 50-day moving average, which shares have been testing over the bast couple of weeks.
Also, the 20-day MA is sitting just above the 50-day MA — something traders may be watching in the event that the 20-day crosses below, giving off a bearish signal.
Investors also should keep their eyes out for Netflix’s upcoming earnings report, which is due out after the close of trading on Monday, April 17.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.
