UPDATE: Citi Upgrades Netflix (NFLX) to Buy
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(Updated - January 31, 2022 5:40 AM EST)
Citi analyst Jason B Bazinet upgraded Netflix (NASDAQ: NFLX) from Neutral to Buy with a price target of $450.00.
The analyst comments "NFLX’s recent price weakness is likely driven by three factors. First, the 2.5m guide for net adds in 1Q22 disappointed the Street. Second, investor nervousness over the competitive environment as content spend accelerates across more players. Third, the margin headwinds (partially driven by a stronger USD) likely weighed on the equity. NFLX’s market multiplier has now compressed to only 1.1x even though investors typically view NFLX as possessing considerable pricing power. Conversely, we remain cognizant of NFLX’s FCF multiple which remains high at around 90x. And the dislocation between earnings and FCF (due to amortization of content costs). On balance, we think the prevailing equity value offers a compelling entry point, and we upgrade NFLX to Buy."
Shares of Netflix closed at $384.36 yesterday.
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