Investors hit the buy button with gusto on Tuesday, after BofA upgraded Netflix stock to ‘Buy’ from ‘Underperform’ with a $72 price target.
Analysts said the worst should be behind Netflix after their dismal second quarter outlook. And they believe the bull case is more convincing than the bear case.
Also developments at a rival were interpreted as beneficial for Netflix.
Coinstar said Monday that one of its top executives was leaving the company next year. Gregg Kaplan, president and chief operating officer of Coinstar, and founder and interim president of Redbox is leaving the company to pursue new opportunities.
Is the tide starting to turn for Netflix shares?
Trader Tim Seymour, founder of EmergingMoney.com, doesn't think so. He believes the BofA upgrade was more of a trading call than a fundamental comment on the company's business.
“I don’t think anyone thinks they’re going to be as cost efficient and prudent on their acquisition costs,” he says.
OptionMonster Pete Najarian agrees. "I think the call is tactical," he says. "The big issue facing Netflix is content and controlling those costs."
Posted by CNBC's Lee Brodie
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