Netflix Pops On Citi Upgrade, But Cycles Point The Other Way

Netflix, Inc. NFLX traded over 5 percent higher on Friday morning, after Citi assured investors that the stock still presents and opportunity.

Citigroup analyst Mark May upgraded Netflix from Neutral to “Buy with a $375 price target. This represents a premium of 17 percent from Thursday’s closing price. With the stock down over 10 percent in recent days, the call represents a buy-the-dip opportunity.

According to May, the bottom line is that, "the opportunity to continue growing international subscribers and exert pricing power leverage remain.”

However, we believe this call represents poor timing. In analyzing the market cycles for Netflix, our analysis is that the stock has begun the declining phase of its current cycle.

This corrective period is far from over, as indicated from our downside target of near $300 by December.

Netflix Stock Chart with Weekly Bars

Related Links:

Citi's May Says Buy The Dip In Netflix

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