UPDATE: Wedbush Securities Reiterates Underperform, $45 PT on Netflix

Wedbush Securities maintained Netflix

at Underperform with a $45 price target following a reduction in subscriber guidance. Wedbush Securities noted, "Management lowered full year net adds guidance to 4.73 – 5.43 million, well below the 7 million guidance it has provided all year. The magnitude of the Q3 miss was only 0.6 million, with guidance lowered by 1.57 – 2.27. Most importantly, Netflix has steadfastly claimed that its content costs are “fixed” (we disagree), meaning that contribution profit will be significantly lower than consensus in 2013. … In our view, Netflix has already converted the vast majority of potential streaming subscribers on mobile devices, consoles, and smart TVs into paying subscribers. We view next month's launch of the Nintendo Wii U, the next generation of consoles (to be released in 2013 or 2014), and additional iterations of mobile phones and tablets as inconsequential drivers of growth." Netflix closed at $68.22 on Tuesday.