Netflix upgraded at Wedbush as 'hell freezes over'
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Netflix (NASDAQ:NFLX) shares rose in premarket trading on Wednesday after Wedbush Securities shockingly upgraded the stock, a sign that "hell freezes over" as the stock has reached the firm's price target. 
Analyst Michael Pachter raised his rating to neutral from underperform, but kept the $342 price target, noting that the recent decline in Netflix's (NFLX) stock reflects the fact that investors have started to appreciated the long-term thesis that it is a "a low growth, extremely profitable enterprise." 
"While we do not anticipate significant share price appreciation in the near-term, Netflixâs first mover advantage and large subscriber base provides the company with a nearly insurmountable competitive advantage over its streaming peers," Pachter wrote in a note to clients.
Netflix shares were up slightly more than 2% to $349 in premarket trading on Wednesday.
Pachter noted that Netflix (NFLX) has likely hit a ceiling on subscribers in the U.S. and Canada and is trying to lower churn, including a new season of Russian Doll starting in the second-quarter and splitting the fourth season of Stranger Things into the second-quarter and third-quarter, splitting it into two volumes.
"We continue to believe that content dumps, where all episodes of a new season are delivered at the same instant, will keep churn high, as price conscious consumers can swap out of Netflix and sign up for a competitor after viewing the content they desire," the analyst explained. "However, the experiment with Stranger Things suggests the company is aware of the cost of churn."
Going forward, Netflix (NFLX) is likely to raise the price of its subscription in the U.S. and Canada to offset increasing content costs, essentially "soaking" its highest revenue subscribers to fund international growth, Pachter explained.
The analyst added that the price could rise as high as $19.99 and not lose many subscribers. Even so, as the firm does raise prices, "the more likely new subscribers will be to churn in and out" and limit its ability to grow.
Yesterday, Netflix (NFLX) Chief Financial Officer Spencer Neumann said the firm has a "never say never" mentality when it comes to introducing advertising on the platform.