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Netflix Gets Vote Of Confidence From RBC Amid Heightened Skepticism

Internet television network Netflix ( NFLX ) has lost 18% of its value since reporting Q1 earnings and offering weak subscriber guidance for Q2. But RBC analyst Mark Mahaney says concerns about Netflix’s prospects are overblown. In a research report Sunday, Mahaney reiterated his outperform rating on Netflix stock, with a price target of 140. Netflix stock was up more than 2%, near 90, in morning trading on the stock market today . Shares have been falling, though, and it’s on IBD Swing Trader as a short-sale possibility. On Friday, Dan Nathan, founder of RiskReversal.com, told CNBC that options volume has grown increasingly bearish on Netflix, pointing to negative sentiment on Wall Street. Netflix has an IBD Accumulation/Distribution Rating of D+, indicating more institutional selling than buying. But the market’s concerns about Netflix’s profitability, international growth and competition are “overstated,” Mahaney said. “We still think NFLX can double in three years.” Netflix has proven profitability, a universal value proposition, material scale advantages and an excellent management team, Mahaney said. Netflix handily beat subscriber goals in the first quarter, but its target for new international subscribers in Q2 of 2 million was almost 1 million below Wall Street estimates. In the U.S., Netflix expects to add just 500,000 new subscribers as price hikes kick in for existing subscribers, increasing member churn. Meanwhile, Netflix is facing increased competition at home and abroad. In the U.S., Amazon.com ( AMZN ) and Hulu are ramping up their original and exclusive content offerings. In the U.K., the BBC is working on an online streaming service with the working name “Britflix” that would compete with the likes of Netflix, according to media reports. RELATED: Netflix Stock Gets Belated Price-Target Cut From UBS 5 Key Takeaways From Netflix’s Troubling Q1 Earnings Report Amazon Goes Head-To-Head With Netflix In Streaming Video

Valeant Expands Rebates On Two Controversially Priced Heart Drugs

Beleaguered drug giant Valeant Pharmaceuticals International ( VRX ) said Monday that it’s expanding the rebate program on two controversially priced drugs, in one of the first significant policy changes under its new chief executive. Valeant said that, effective immediately, all hospitals buying the drugs are eligible for a rebate of at least 10%, and possibly as high as 40%, depending on the volumes bought per quarter. This will be done largely through group purchasing organizations, but hospitals not using those can contact Valeant’s customer service directly, the company said. Nitropress, used to treat heart failure and high blood pressure, and Isuprel, used in the treatment of heart attacks, gained notoriety last year when Valeant hiked their prices by triple-digit percentages after acquiring them. This, along with some other drug-price scandals, led to Valeant’s management being hauled before a Senate committee, which Valeant CEO Joseph Papa thanked in Monday’s press release for “the attention they have brought to this issue.” Papa just joined the company on May 3, as previous CEO J. Michael Pearson was pushed out after watching the company’s stock tumble almost 90% under the weight of the pricing issue, as well as an accounting scandal. Pearson had already signaled that Valeant isn’t going to be pricing drugs as high as it used to and will no longer be looking for older assets like Nitropress and Isuprel, whose chief attraction is that they could be more expensive. Despite the move, Valeant stock was down 2% in late-morning trading on the stock market today , near 25. The stock so far hasn’t fared much better under Papa than it did under Pearson, hitting a six-year low of 23.54 on Thursday. It didn’t help matters that hedge fund Brahman Capital sold its stake in Valeant , according to Bloomberg, as well as in Endo International ( ENDP ), another troubled specialty drugmaker run by a former Valeant executive.

Globalstar Pops, Could Defeat Google, Microsoft On Wi-Fi Spectrum

Globalstar ( GSAT ) stock popped for the second straight trading day on views federal regulators will green light its petition to open up spectrum airwaves in the 2.4 GHz block for wireless services. Globalstar, a mobile satellite service operator, had faced opposition from Alphabet ’s ( GOOGL ) Google, Microsoft ( MSFT ) and the cable TV industry over concern the airwaves could interfere with Wi-Fi services. Comcast ( CMCSA ) has been expanding its public and residential Wi-Fi network and might jump into wireless services, analysts say. Tom Wheeler, chairman of the Federal Communications Commission, on Friday proposed an order that would allow Globalstar to move forward with its “authenticated Wi-Fi” service. Globalstar stock, which popped 35% on Friday, was up another 15% in morning trading in the stock market today , albeit still trading below 3. It’s possible Globalstar’s opponents such as  Microsoft or Google could make a last-ditch effort to block approval, analysts say. The FCC could issue new rules as soon as  June. Paul Gallant, an analyst at Guggenheim Partners, says a remaining issue is what limitations the FCC’s order puts on Globalstar’s commercial rollout. “There has been some concern that an FCC approval could be a Pyrrhic victory if the agency attached heavy limits on power output or out-of-band-emissions that restricted the value of Globalstar’s proposed service,” wrote Gallant in a research report. “We suspect the technical parameters are likely to approximate what Globalstar initially proposed 2.5 years ago. That would be positive for its new service.” Amazon.com ( AMZN ) reportedly had tested Globalstar’s spectrum a couple of years ago, said one report.