Shares of Netflix (NASDAQ:NFLX) saw an increase of over 3% intra-day today following Morgan Stanley’s decision to raise their price target for the company from $475 to $550 per share.
The analysts at Morgan Stanley, who rate the company as Overweight, highlighted several factors contributing to their positive outlook. They pointed to the company’s “attractive risk/reward” profile, heightened confidence in Netflix’s efficiency in content spending, and successful execution of growth strategies, such as introducing paid sharing and advertising. Additionally, they observed a reduction in competitive intensity within the broader media sector.
Morgan Stanley also mentioned that Netflix has started to hedge against currency fluctuations, which is expected to positively impact earnings. However, they noted that the effects of these foreign exchange movements would be reflected with some delay in reported results.