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Netflix may miss subscriber guidance, but it's still a buy, Morgan Stanley says

Scott Eelis | Bloomberg | Getty Images

Morgan Stanley reiterated its overweight rating on Netflix due to its strong growth potential next year, but the firm warned investors the video streaming company may miss its subscriber forecast for the third quarter.

Longtime Netflix members face a $2-per-month price hike this year after the "grandfathering" grace period from 2014's price increase ends.

"Netflix will see 'peak un-grandfathering' in 3Q, leading to risk [subscriber] net adds come in below guidance," analyst Benjamin Swinburne wrote in a note to clients Wednesday.

"However, this year's large reset lower in growth expectations, continued supply of content from the major TV studios and competitors closing shop leave us bullish long term."

Netflix is scheduled to announce third-quarter financial results on Monday.