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Time To Take Some Profits From Netflix, Inc. (NFLX) As Stock Could Drop To $400: Guy Adami

Netflix, Inc. (NASDAQ:NFLX) remains the clear winner of the ongoing TV bundling race even as the video streaming heavyweight continues to face headwinds in form of competition in the industry. The streaming giant moved higher in the market on analysts at Cantor Fitzgerald increasing their share price target to $500 with a ‘buy’ rating. However, the biggest concern according to CNBC contributor, Guy Adami, is whether the stock can be able to sustain the high valuation, going forward.

Netflix, Inc. (NASDAQ:NFLX)

Barclays PLC (ADR) (NYSE:BCS) has also increased Netflix share price target to $450 citing valuation for 2016. At the current trading levels, Adami affirms that one would rather be a seller than a buyer on Netflix.

“My view was that if it broke $440, it would trade down to $400 quickly on March $18 I think it printed $415; it has bounced since then. I think this $440 level is resistance. I am more into take profit camps right here and see what happens, see what plays out on earnings on April 20th. I think it trades down to $400,” said Mr. Adami.

The ongoing unbundling around TV is expected to speed up the migration into Internet TV, which could be of great benefit to Netflix. However, Timothy Seymour affirms that Netflix, Inc. (NASDAQ:NFLX) is not a media company and remains overpriced at the current levels.

“Six months ago after HBO started talking about unbundling and people talked about unbundling, this was bad news for Netflix. So what these guys are saying in an unbundled world Netflix is king, I think it is very-very debatable. I think this is a technology company, not a media company, and I think it is overpriced,” said Mr. Seymour.

Netflix, Inc. (NASDAQ:NFLX) has been on an international expansion drive having touched ground in Australia and New Zealand. Pete Najarian affirms the stock could go even higher on getting it right in Latin America where the company continues to face major headwinds compared to Europe which is doing extremely well.

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