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Netflix Inc.: Morgan Stanley analyst Scott Devitt lowered a recommendation on shares of Netflix Inc. (NFLX) to equal-weight from overweight on Mar. 12. In a note, Devitt said the rating change on the largest U.S. mail-order movie-rental service was based on the stock's valuation. "We remain positive on Netflix's core DVD-by-mail and digital offering, but the recent rally in [the] share price, expectation of future earnings beats, longer-term potential hike in postal rates, [and] competition from Redbox and emerging digital players lead us to look elsewhere for investment ideas," the analyst wrote. Devitt noted that Netflix's shares were 59% since mid-August, vs. gains of 19% for the Nasdaq composite index and 15% for the S&P 500 index. "We think Netflix shares are fairly valued and that short interest of [nearly] 19% could provide near-term support if the company continues to beat [or] meet expectations as we expect," Devitt wrote. "We believe Netflix's hybrid distribution model (physical DVD-by-mail and digital streaming) positions the company favorably to capture meaningful share of the video/TV rental market." Read more..

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