Two Notable Upgrades and Downgrades

October 17, 2019 - By: Baystreet Staff

Per Tipranks, analysts change stock rankings all the time. Although they are not always right on the call, their opinion can move the stock.

Broadcom (NASDAQ:AVGO) received a "hold" call rating from a Cowen analyst on Oct. 10. At a $285 price target, the stock has no upside but investors should notice the narrow trading range of $275 - $300 in the last few months.

Though markets worry over Broadcom’s two strategic acquisitions, its latest Symantec acquisition will pay off. As it shifts from hardware to software, profit margins will improve.

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Goldman Sachs ranked Netflix (NASDAQ:NFLX) a "buy" but rightfully lowered its price target. Netflix reported its first drop in the U.S. paid subscribers since 2011. The sign-up growth will continue slowing in the U.S., arguably its most important region, as competition grows.

Apple and Disney will sell their services at a lower subscription rate to lure viewers. This will pressure Netflix’s pricing. More worrisome is that Netflix has high debt levels and needs both higher subscription growth and higher rates to pay off the interest.

It also needs more cash flow to buy content. But if the other online streaming services cause content costs to go up, Netflix will face series pressures on cash flow growth.

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