NEW YORK (TheStreet) -- Shares of Netflix (NFLX) are climbing after Morgan Stanley upgraded the stock and research firm Pacific Crest issued a positive take on the shares in separate notes to investors earlier today.
WHAT'S NEW: Morgan Stanley analyst Benjamin Swinburne assumed coverage of Netflix with an Overweight rating, up from an Equal Weight rating. The company can grow its U.S. subscription base to about 55M by 2020, Swinburne estimated. Meanwhile, using the same business model that has proven successful in its initial markets, the company should be able to increase its market share of overseas broadband Internet households to about 20%, predicted the analyst. He estimated that Netflix's share of broadband households in its current international markets is about 10%. Moreover, Netflix's total potential overseas market should rise as more households get broadband Internet access, Swinburne added. Netflix's international margins should also increase over the long-term, the analyst believes. He set a $500 price target on the shares and recommended buying the stock on pullbacks. Also upbeat on Netflix's international outlook was Pacific Crest analyst Andy Hargreaves. Netflix's international subscriber base is likely to surpass expectations by large amounts as it expands into new markets and adoption rates in overseas markets rise, the analyst stated. Adoption rates in Netflix's current overseas markets are already accelerating and the company could expand into new markets with up to 75M additional broadband households over the next two years, according to Hargreaves, who kept a $520 price target and Outperform rating on the shares.
PRICE ACTION: In mid-morning trading, Netflix rose $13.15, or 3%, to $443.41.