Only hours after investors sent Netflix (NFLX) shares tumbling 13% following its second-quarter earnings results, Deutsche Bank downgraded the stock to HOLD from BUY. The rating agency also lowered the price target on the company’s stock from $360 to $350. Meanwhile, analysts at Deutsche Bank maintained that the company’s long-term outlook has not changed much and that they continue to believe that the stock price can double in value to $700 by 2025.
“Despite continuing to like the story, we just don’t see much upside over the next 12 months at this valuation level,” Deutsche Bank said in a note to investors. Reaffirming its long-term belief in the stock, the firm pointed out that it is still trading at the levels seen two months back, despite the drastic drop on Monday.
The downgrade follows a slew of recent price target upgrades by various rating agencies including GBH Insights. A month back, the rating agency had boosted Netflix’s price target from $400 to $500 in a single go.
RELATED: Netflix stock slides on disappointing subscriber growth in Q2
Netflix shares took a plunge on Monday after the streaming giant said it added fewer subscribers than expected. The company reported 5.15 million subscriber additions, missing its own target of 6.2 million by a wide margin. The subscriber growth miss became a dark spot on the company’s history of beating estimates and posting breakneck additions.