Netflix price target raised to $920 from $725 at Citi

Citi raised the firm’s price target on Netflix (NFLX) to $920 from $725 and keeps a Neutral rating on the shares. The firm believes multiple expansion driven by incremental confidence in the company’s advertising tier has been the primary driver of Netflix’s equity returns this year. Bulls believe the ad tier can drive both drive incremental subscribers and average revenue per user, contends Citi. It believes that while Netflix’s ad-tier net adds have accelerated, most of this is driven by “spin downs.” The firm does, however, agree with the bulls and sees scope for Netflix’s ad tier to be a revenue tailwind over the next several years. All told, even with this tailwind, consensus estimates look reasonable, and the shares offer limited upside from prevailing levels, contends Citi.