Investors should buy Netflix shares because the company's international subscriber additions this year will come in above current expectations, according to UBS.
It upgraded the streaming video company to buy from neutral.
"Netflix is certainly well-liked and not inexpensive, but we do see the potential for Netflix to exceed Street subscriber growth expectations and believe that concerns regarding competition and content costs are misplaced," analyst Doug Mitchelson wrote in a note to clients Sunday. "We expect Netflix's original content ramp to continue to drive accelerating international net additions, especially as [Netflix] increases investment in local content overseas and adds more movies and nonfiction genre content."
Netflix shares are up 12 percent year to date through Friday and have rallied nearly 40 percent in the past six months. The shares surged after the company reported better-than-expected fourth quarter subscriber numbers on Jan. 18.