Why now is not the right time to buy Netflix stock

Netflix Inc. shares fell 1% in early trade Monday, after Deutsche Bank initiated coverage of the stock with a sell rating and $90 price target believing that market expectations for the streaming giant are too optimistic.

Analysts said they are positive about the business, noting that Netflix has a good base for growth thanks to its first-mover advantage and self-reinforcing business model. But with costs rising and a takeover deemed unlikely, they are cautious on the stock.

“This is a very long duration, high multiple investment with market expectations that appear too high through 2020, when most analysts seem to be looking for valuation support,” analysts wrote in a note.

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