March 22, 2011, 3:31 PM — For the second time in a week, shares of video streaming market leader Netflix (NASDAQ: NFLX) benefited from
investors' inability to think for themselves an analyst's upgrade.
Credit Suisse bumped its rating for Netflix to outperform from neutral on Tuesday, discounting the threat of competition from larger companies eyeing the lucrative streaming video market. The analyst firm also moved its 12-month target price for Netflix to $280 from $180.
By mid-afternoon Tuesday, Netflix was trading at 220.09, a gain of 7.25, or 3.4 percent, over Monday's close. Earlier Tuesday, Netflix hit 222.70, 4.6 percent above Monday's ending price.
This comes exactly one week after Netflix shares soared in response to an upgrade by Goldman Sachs (see link above). The only new information in both cases is that some analysts changed their opinions about the impact of competition on Netflix, which has more than 20 million subscribers. In other words, Netflix didn't release earnings or announce some kind of deal -- it just continued to be Netflix, which apparently is now more than 3 percent better than before. At least until someone else says something.
Netflix hit an all-time high stock price of 247.55, but lost a lot of altitude when both Amazon.com (Feb. 22) and Facebook (March 8) announced plans to offer streamed videos.
In its note to investors, Credit Suisse said a streaming-media initiative by Amazon.com, announced on Feb. 22, wouldn't have a major impact on Netflix's business. (Where have we heard that before?) Not sure what Credit Suisse thinks of the Facebook challenge, though. Maybe they posted something about it on their wall.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.