- Citi is raising its price targets on two elephants in the streaming-video space, but it still has a clear preference between the two.
- It's boosting its target on Netflix (NFLX -0.7%) - to $580 from $450, implying 15% upside. And it's raising its price objective for Disney (DIS +0.5%) to $205 from $175 (16% upside).
- But it continues to prefer Disney between them, and it rates Disney Buy and Netflix Neutral.
- That's due to two reasons, analyst Jason Bazinet says. One is that Disney's status as a late entrant gives it a "quicker and easier" path to subscriber growth over the next three years.
- "Second, we suspect Netflix may have some hiccups over the next few quarters as price hikes potentially dampen quarterly net adds, tactically disappointing the Street," he says. Disney by contrast is apt to keep prices relatively stable, he adds.
- Netflix's earnings are nigh: It's expected to report on Tuesday, with consensus expectations for EPS of $1.40 on revenue of $6.62B.