Netflix stock boasts one of the ugliest charts you'll ever see.
However, at least one analyst thinks it's finally time to buy.
Morgan Stanley's Scott Devitt raised Netflix to "overweight" this morning while maintaining his $85 price target, which represents an upside opportunity of almost 30 percent.
"Why now?" writes Devitt. "Our upgrade is based on our view that Amazon.com is not a direct threat to Netflix’s US business. We believe the primary driver of content revaluation was Netflix’s own success. "
More on Amazon:
Amazon.com’s strategy around Prime Instant Video is an adapted “freemium” model. Prime customers receive free content and then supplement their viewing experience by renting movies from Amazon. This offering only works if Amazon.com keeps Prime Instant Video tethered to Prime. Once they offer a standalone product, they will face the Netflix content gap, which will cost an incremental ~$1.0-1.2B to close. We believe Amazon.com would rather invest that in other initiatives.
Devitt acknowledges that international expansion will be challenging. But he also believes the downside risk is minimal because the "value of the domestic business is enough to support the stock at current levels."
The stock is up around 7 percent early in the trading session.
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