Why Evercore ISI Thinks Netflix Will Drop 13%

Evercore ISI said that Netflix, Inc.'s NFLX 26 percent gains this year are overdone as the analysts slashed its price target by $70 to $380. Netflix recently traded at $430, down 2 percent on the session.

Evercore said that the "intensifying competitive environment" will lead to "uncertain return" in Netflix. Evercore noted that infrastructure improvements in the U.S. are at a point where Netflix will see competition from Snapchat, Hulu, Yahoo! Inc. YHOO, and Amazon.com, Inc. AMZN.

International expansion will help Netflix, Evercore projected; however, it also brings unique challenges that will offset optimism.

In conclusion, Evercore said that its $380 price target still reflects a "premium valuation."