Morgan Stanley upgrades Netflix after blowout earnings, sees 20% upside potential

Morgan Stanley hiked its rating on Netflix following the streaming giant's stellar earnings report, seeing the shares potentially rising 20% on strong revenue growth. The Wall Street firm's analyst Benjamin Swinburne upgraded Netflix to overweight from equal weight Thursday, while raising his 12-month price target to $475. The new forecast represents 20.6% upside from Thursday's trading level around $394.

mountain Netflix Morgan Stanley praised Netflix's "strong operational execution and improving return on content spend." Meanwhile, the bank said Netflix has a clear framework for investors to consider how it balances investing while driving profit margins. "Against this rising anxiety and falling stock price, the business has been accelerating, the password crackdown is working, and the competition has pulled back," Swinburne said.

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