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Netflix analysts turn into TV critics and throw stock downgrades instead of tomatoes

Netflix analysts turn into TV critics and throw stock downgrades instead of tomatoes
[Photo: Flickr user Jenny Cestnik]

Netflix is set to release its earnings report later today, and some analysts aren’t fond of the company’s recent performance. In fact, Buckingham Research Group downgraded the company’s stock to “underperform,” according to CNBC.

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The streaming service’s TV lineup had a lot to do with it. In his new note, Buckingham’s Matthew Harrigan wrote, “Second-quarter 2018 original content and new season installment quality is underwhelming, even as sheer output volume enabled Netflix to finally pass HBO in the number of Emmy Award nominations.”

In short, he wasn’t happy with the company’s content–awards and prestige be damned.

Buckingham’s ultimate point is that competition is getting stiffer, and Netflix’s dominance could be usurped down the line. Though Netflix will likely report a subscriber increase in its second-quarter earnings, the company’s marketing spend is also ballooning. As the analyst sees it, with more TV companies producing original work, the only way for Netflix to forge ahead is to make the best original content. And this year’s roster didn’t dazzle–at least according to Buckingham.

Other analysts have expressed similar concerns: UBS downgraded Netflix’s stock last week, and Deutsche Bank has also feeling tepid about the company.

Netflix stock was up a little bit this morning–although it’s seen a steep decline over the last five days. We’ll see what investors do after numbers are released this afternoon.

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