Shares of Netflix, Inc. (NASDAQ:NFLX) are trading down 1.7% at $319.71 after Stifel downgraded the FAANG stock to "hold" from "buy." The brokerage firm also raised its price target to $325 from $283, saying it is still optimistic on the company's competitive advantage, but it believes the short-term share price has grown faster than fundamentals.
Stifel's new NFLX price target is in line with last night's record close at $325.22, with the shares topping out at an all-time intraday peak of $325.79 earlier in the session. This positive price action is just more of the same, though, with the security up 69.4% year-to-date heading into today's trading -- the best S&P 500 Index (SPX) stock so far this year.
As such, the shares may have been due for a short-term pullback, considering their 14-day Relative Strength Index (RSI) settled Tuesday at 80. In other words, Netflix was overbought coming into today.
And despite Netflix stock's long-term technical strength, there's an ample amount of skepticism still priced in -- which could create tailwinds for the shares on a potential unwind. In fact, nearly two-fifths of analysts covering NFLX stock maintain a "hold" or "sell" rating, while the average 12-month price target of $273.23 sits at a discount to current trading levels.
Those looking to bet on a Netflix bounce may want to consider doing so with options. The stock's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 86 (out of a possible 100), meaning NFLX has consistently outperformed options traders expectations -- a potential boon to premium buyers.