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Nearly a week after Netflix ( NFLX ) reported mixed first-quarter earnings and gave disappointing second-quarter guidance, UBS analyst Doug Mitchelson joined the crowd on Wall Street and lowered his price target on Netflix stock. About a dozen analysts cut their price targets on Netflix within a day of the Internet TV service releasing Q1 results after the close April 18. At the time, Mitchelson reiterated his buy rating on Netflix and his price target of 147. On Monday, Mitchelson maintained his buy rating but cut his price target to 141. Netflix stock was down 2.5%, near 93.50, in afternoon trading on the stock market today . Earlier, Netflix stock touched a two-month low of 92.80. Last Monday, Netflix had ended the regular session at 108.40. “We believe expectations for growth have been reset, and catalysts rebuilding for Netflix, after a negative catalyst period (global rollouts completed ex-China and Q2 seasonality not modeled right by the Street),” Mitchelson said in a report. Netflix should show stronger international growth the rest of the year, exiting the seasonally weak first half, he said. Profit margins in the second half of the year “should ramp aggressively” as price increases flow through to the bottom line and global rollout costs ease, he said. Mitchelson predicts that Netflix will penetrate 60% of U.S. broadband homes by 2020 (61.3 million subscribers) and 13.8% of international broadband homes by 2020 (101.4 million subscribers). “We believe Netflix’s core competencies in both content and technology will drive a virtuous circle of greater subscribers and increased viewing time, enabling higher ARPU (average revenue per user), which will fuel increased content spending and attract/retain more subscribers globally,” he said. Image provided by Shutterstock . RELATED: 5 Key Takeaways From Netflix’s Troubling Q1 Earnings Report . Scalper1 News
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