Two big Wall Street banks just raised their Netflix stock forecasts because of its global opportunity

Key Points
  • Morgan Stanley and J.P. Morgan raise their price targets for Netflix, citing the company's ability to successfully launch its service in new countries.
  • One analyst predicts the company can grow to more than 300 million subscribers by 2028.
(R-L)Sandeep Kataria, Director Commercial Vodafone India; Reed Hastings, Co founder and CEO, Netflix and Himanshu Patil , COO Videocone d2h Limited at Netflix's Multi-Platform Parterships Annoucement on March 6, 2017 in New Delhi, India.
Sushil Kumar | Hindustan Times | Getty Images

Netflix shares will rise as the streaming giant will generate strong growth in its international markets, according to Morgan Stanley.

The firm raised its price target to $350 from $275 for Netflix shares, citing the company's proven ability to successfully launch in new countries. Morgan Stanley also reiterated its overweight rating for the company's shares.

In a similar move, J.P. Morgan raised its price target to $328 from $285 and reaffirmed its overweight rating for Netflix shares Tuesday, predicting the company will report "strong" first-quarter financial results.

"We believe Netflix is still in the early stages of global adoption," Morgan Stanley analyst Benjamin Swinburne wrote in a note to clients Tuesday. "While there remains a big opportunity in many of Netflix's older markets, as evidenced by continued strong growth in the US, Asia is perhaps the largest untapped opportunity and likely its most challenging one to capture."

Netflix shares rose 2.1 percent Tuesday after the report.

The company's stock is the third best-performing name in the S&P 500 so far this year with a 51 percent gain through Monday.

Swinburne said Netflix has about 120 million global subscribers in a total market of more than 600 million global broadband households outside of China. He predicts the company can grow to more than 300 million subscribers by 2028.

"We believe share performance is highly dependent on increasing global membership scale," he wrote. "Proven success in the US and initial int'l markets provides a roadmap to success in new markets, and scale should allow NFLX to leverage content investments and drive margins."

— CNBC's Michael Bloom contributed to this story.