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Sell Netflix on slowing US growth: Jefferies

Reed Hastings, CEO of Netflix.
Mark Neuling | CNBC

Investors should sell Netflix on weaker U.S. subscriber growth and increasing competitive threats, according to Jefferies, which downgraded the internet video streaming giant to underperform from hold.

"Although NFLX's runway will span multiple years, our research suggests the domestic subscriber growth trajectory may be somewhat flatter than the market's current expectations," Jefferies analyst John Janedis wrote in a note to clients Wednesday.

"While Int'l will remain strong, we think the slowing U.S. market will pressure the stock's multiple."

Janedis lowered the firm's Netflix price target to $80 from $120, representing 18 percent downside from Tuesday's close. The stock is already down 14 percent this year.