Netflix Gains Ground As Wedbush Upgrades To Buy

Netflix (NFLX) shares are getting a boost this morning from Wedbush Morgan analyst Michael Pachter , who raised his rating on the shares to Buy from Hold, while keeping his $48 price target. The stock closed Tuesday at $37.83. Pachter thinks the gradual shift to streaming content from disc rental will allow the company to expand its margins, eliminating postage costs and other expenses. He also says a recent increase in Blu-Ray disc pricing could drive up average revenue per use. Meanwhile, he sees a re-acceleration of account activations from Xbox Live users in the second half of the year, as Xbox Live Gold members get the ability to manage their streaming queues directly, without have to go through the Web site. Pachter contends the stock’s valuation is “compelling.” NFLX today is up $1.67, or 4.4%, to $39.50. (link)