Morgan Stanley (NYSE:MS) has taken a bullish stance towards Netflix, Inc. (NASDAQ:NFLX). Scott Devitt, an analyst at the investment bank, revealed this through a report, noting that Amazon.com, Inc. (NASDAQ:AMZN) was no longer considered to be a direct threat to Netflix’s prosperity. Devitt has upgraded Netflix to ‘overweight’; a rating that essentially recommends a buy. He has increased the price target on the stock to $85 percent. This increased price target is close to 30 percent above Friday’s closing price of $ 66.5.
“Netflix, Inc. (NASDAQ:NFLX) is poised to leverage its domestic cost structure and potentially become the global video platform,” notes an evidently bullish Devitt in one of his research notes. Devitt also echoes the fact that the current value of Netflix’s domestic business alone is sufficient enough to sustain its stock at the current levels. One key highlight in his research is his slant towards the global market. “While international is driving the consolidated business to breakeven levels, there is real option value in the global story”, he notes. This underscores Netflix’s commendable global footprint.
Devitt is also particular on Amazon’s approach towards its prime shipping service. The Morgan Stanley (NYSE:MS) analyst is keen to note that contrary to what most investors believe; Amazon is unlikely to scrap off its Prime Instant Video from its Prime Shipping Service. He further notes that a standalone product for Amazon.com, Inc. (NASDAQ:AMZN) would gnaw into its market share.
Increased positive sentiment among notable parties
Interestingly, there has been an increased positive sentiment over Netflix’s stock. Morgan Stanley (NYSE:MS) actually joins Citigroup in advocating for a Netflix buy. Citigroup Inc. (NYSE:C), which is also an investment bank and an avid competitor to Morgan Stanly, noted last week that Netflix, Inc. (NASDAQ:NFLX) was a ‘screaming buy’. With some of the big wig investment banks in Netflix’s stable, speculation is rife that its stock will react positively over the coming week.
As we had reported earlier, Whitney Tilson was notably bullish on Netflix, Inc. (NASDAQ:NFLX) during the 8th Annual Investing Congress, that took place at the onset of last week. Just like Morgan Stanley’s Scott Devitt, Tilson was also exclamatory on Netflix’s increased prospects in the global front.
Towering hedge fund managers, like George Soros and Steve Mandel have also expressed a bullish spirit towards Netflix, Inc. (NASDAQ:NFLX).