UPDATE: Bank of America Downgrades Netflix to Underperform

Bank of America has published a research report on Netflix NFLX and has downgraded the company from Neutral to Underperform since the stock has shown a 42% this year so far. In the report, Bank of America writes, "We are downgrading Netflix to Underperform from Neutral after the stock's 42% year-to-date increase, a move we consider unwarranted. We see five main overhangs to the stock heading into 2012: 1) second wave of negative press leading into 2012, 2) customer loyalty dwindling, 3) international expansion could prove to be a drag on profitability post 2012, 4) rising content costs making it expensive to refresh streaming library, and 5) 35mn, up from 24mn at the end of 2012, domestic subscribers needed to reach our 2013 estimates. Our $85 price objective (PO) is based on 27x our 2013 non-GAAP EPS estimate of $3.14." Netflix closed yesterday at $98.18, a 13.78% increase from market open.