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Is the Netflix Debate Scaring Investors Off?

On Tuesday, Bank of America Merrill Lynch analyst Nathaniel Schindler downgraded shares of Netflix to "underperform" from "buy."

Netflix
Netflix

Though part of the downgrade rationale was on valuation following Netflix's recent run, he also expressed concern about competition from Amazon.com’s growing streaming video business. Schindler’s price target on Netflix is $72. He views Amazon as a real risk. (Read More: Netflix to Trigger the 'Chanos' Rule'?)

Morgan Stanley couldn’t disagree more.

On Monday, Morgan Stanley’s Scott Devitt upgraded Netflix to "outperform" from "neutral."

Devitt also referenced Amazon.com, but unlike BAML’s Schindler, Devitt doesn’t believe Amazon is a real competitive threat. He thinks the firm won’t spend perhaps the billion dollars-plus to close the content gap with Netflix. His price target is $85. (Read More: Netflix: Still Worth Putting in Your Queue?)

What’s a Netflix investor to believe?

Though analysts frequently express different opinions and price targets on stocks, it is fascinating to watch this great dance around Netflix and Amazon.com, as the specter of Amazon’s growing service continues to hang over its smaller competitor. It is also hanging over investors, as they are forced to listen to wildly different views on the issue.

Markets take a buyer and a seller, and analysts can disagree. But for two analysts from respected firms to have such different opinions about a multi-billion dollar competitor’s impact on a given name gives me pause. If they can’t figure out the real risk to Netflix, why should an investor bother with the stock?

My colleague Herb Greenberg argues this is what’s right with the market. I think it scares people off. Your thoughts?

—By CNBC's Brian Sullivan
@SullyCNBC

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