Citigroup raises its rating on Netflix NFLX to Buy from Neutral and increases its price target by $50 to $130 as the company posts a solid beat on quarterly expectations and gives signals of recovery and growth stabilization.
Citigroup lists these signs: "1) Q1 Guide for approx. 1.5-1.7MM Domestic Streaming Net Adds is consistent with Q2:11 pre-apocalypse Net Adds of 1.8MM – suggests NFLX's Streaming segment is back to growth; 2) Q4 Domestic Streaming Contribution Margin of 11% (vs. 8% est) and reaffirmed Guide for Margin expansion addresses some Streaming profitability concerns; 3) Q4 International Contribution Loss at low end of Guide range with peak Q1 loss of $110MMish suggests control over International investments; 4) Our Q4 Proprietary Survey work established at-least stabilization in NFLX customer satisfaction with no competitive erosion."
NFLX closed at $95.04 a share on Wednesday.
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