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Citigroup On Netflix: Waiting For The Blurry Picture To Come Into Focus

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Mark May of Citigroup commented in a note to clients on Tuesday that shares of Netflix, Inc. (NASDAQ: NFLX) have significant upside, but under a few conditions.

May notes that he first needs confirmation that the deceleration in domestic subscriber growth in the third quarter is “not a new trend-line.” The analyst continues to look at Netflix's international subscriber growth in the third quarter and fourth-quarter outlook for signs that the company is not experiencing poor demand in recently launched countries.

The analyst adds that Google Inc (NASDAQ: GOOG) Trends data (which has shown a high correlation to Netflix's subscriber additions) hints that third-quarter trends have not shown any improvements and the company will continue operating with unresolved negative overhangs.

“Our analysis of search data suggests that the newer international markets are experiencing a faster deceleration than earlier markets,” May wrote. “As such, at this point we do not expect upside to fourth quarter estimates.”

With that said, May maintains a Neutral rating with a $364 price target and advises investors to “stay on the sidelines.”

Latest Ratings for NFLX

DateFirmActionFromTo
Jan 2020CitigroupMaintainsNeutral
Jan 2020GuggenheimMaintainsBuy
Jan 2020OppenheimerMaintainsOutperform

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Posted-In: Citigroup Google Trends Mark May NetflixAnalyst Color Analyst Ratings

 

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