Citi Downgrades Netflix, Says It's Hard To Top The 'Raging Bull'

In a report published Thursday, Citi analyst Mark May downgraded the rating on

from Buy to Neutral, with a price target of $722. The share price has risen 99 percent, year to date, although more signs of traction might be required in the recently launched markets before investors see any upside. The stock has witnessed consistently high selloffs for the past three years, following Netflix's 2Q and 3Q earnings reports. In addition, "the ratio of sell-side Buy ratings has only been this high once before (and that was nine years ago)," May noted, while adding that he remained positive regarding the company's long-term growth prospects. According to the Citi report, "[A]t the current price we believe investors are paying fair multiples for markets already launched or expected to be launched this year… We believe most investors are unlikely to ascribe this full value until there are more signs of traction in recently launched markets, which may not be imminent." Over the last 12 quarters, there have been signs that Netflix's shares face consistent seasonality in trade, especially following the company's quarterly results. The stock performance has consistently been better after the release of the 1Q and 4Q results, with content lineup tending to be strong in 1Q and eCommerce being strong in 4Q. "Shares have been consistently and meaningfully weaker following 2Q and 3Q results, when the content lineup is less robust and preceding bullishness more pronounced," May added.