UBS analyst Eric Sheridan downgraded Netflix Inc.'s stock /zigman2/quotes/202353025/composite NFLX -3.40% to neutral from buy Tuesday, writing that while the company looks poised to report a strong June quarter as it continued to benefit from COVID-19 lockdowns, investors seem to have already priced in these benefits to Netflix's shares. The stock is down 1.7% in premarket trading Tuesday. "Unlike prior periods over the last few months (with debates centered around competition with Disney, balance sheet vs. free-cash flow generation, content costs/competition), investor fears seem to have disappeared and the current stock price increasingly reflects many of the long-term business moat dynamics including sustained growth in users/revs and steady state margin expansion," Sheridan said in his note to clients. He sees tough subscriber comparisons ahead for the company next year and wrote that he "would rather be constructive at levels when a mix of potential subscriber volatility, FCF dynamics & competition are better reflected in the share price." Sheridan kept his $535 price target unchanged. Netflix shares have rallied 26% in the past month as the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.80% has risen about 4%.