Citi's 3 Reasons To Buy Netflix

Citi upgraded Netflix, Inc. (NASDAQ: NFLX) from Neutral to Buy and slapped a $525 price target on shares, 19.5 percent above Thursday's closing price. Citi analysts framed their bullish argument in three factors:

Recent price declines from 52-week highs made in February. At these prices, Citi said that investors are paying "reasonable multiples" for Netflix's core North American and UK/Ireland markets, while basically getting other international growth for "little to nothing." Those international markets have more than 350 million households with broadband.

Netflix continues to push out strong content. Citi pointed to the 2015 content as improved from prior years – a main factor that should drive subscriber growth.

Data shows that Netflix is "disruptive" to video viewing habits and "the broader media landscape."

Related Link: Netflix Will Soon Be 'The Most Powerful Media Company In The World;' Here's Why

Netflix is scheduled to report earnings next Wednesday. Citi said it expects the report to be in-line with Street forecasts on both earnings and management guidance and subscriber growth of 1.8 million in Q1. Citi warned, however, that management has a history of guiding lower for Q2 subscriptions, which could create a risk to the immediate price action.

Netflix recently traded at $451.50, up 2.7 percent in Friday's premarket.