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Pro Analysis

Top analyst says sell Netflix on Hulu competition

The Netflix Inc. app displayed on a television in Tiskilwa, Illinois.
Daniel Acker | Bloomberg | Getty Images
The Netflix Inc. app displayed on a television in Tiskilwa, Illinois.

Netflix shares will drop 18 percent over the next 12 months, according to Axiom Capital Management's Victor Anthony, who initiated the video- streaming leader on Monday with a rare sell rating.

"We see rising competition, diminishing pricing power, and rising content costs putting pressure on Netflix's ability to meet consensus longer-term subscriber growth and profit estimates," Anthony wrote. "Investors are paying a super-rich multiple that, in our minds, calls for near flawless execution, an expectation we believe will be hard to achieve."

Anthony's calls had an average return for clients of nearly 13 percent, according to TipRanks. That return makes him one of the top 100 analysts on all of Wall Street, according to the website. Of the 41 analysts who cover Netflix, just 12 percent have a sell rating on the stock, the rest recommend buying or holding the shares, according to FactSet.