SunTrust Lowers Price Target On Netflix

SunTrust commented on Netflix, Inc. NFLX Thursday after its disappointing report and lowered the price target from $525 ro $375.

Analyst Robert S. Peck noted that it was a "surprising/disappointing quarter that will stoke key debates particularly over International opportunity/trajectory. However, we do not believe the favorable long-term story is derailed."

Peck maintained a "Neutral rating with the stock down ~26% after-hours. We lower our numbers and relatedly our price target to $375 (from $525), based on 21x 2016 EBITDA and 41x 2016 EPS (prior target multiples 22x/41x)."

"Content obligations increased 37 percent to $8.9 billion versus our forecast of 27 percent growth to $8.2 billion," and "CFO commentary seemed to suggest the company could look to raise capital," according to Peck.

Netflix, Inc. traded at $332.91 in the premarket, down 25.79 percent.