Netflix Fundamentals Call for Q3 is Positive; Hold Rating and Price Target Maintained

When Netflix, Inc. NFLX makes its report on October 20th, Citigroup will be looking for $553MM in revenue and GAAP EPS of $0.72, vs. Street estimates of $551MM and $0.71. Based on intra-quarter data and channel checks, management public commentary, and Citigroup's own model sensitivity work, the company views Street estimates as reasonable, with Flywheel Factors much more likely to lead to upside rather than downside variance to estimates. “We continue to view NFLX as one of a handful of Core Holdings in the Mid/Small Cap ‘Net sector, which means it's a buy-on-dips not sell-on-rallies stock,” Citigroup writes, noting that it maintains its Hold rating and $120 price target. Netflix currently trades for $155.67.