Morgan Stanley Comments On Netflix's Qwikster Back-step

Morgan Stanley has published a research report on Netflix (NASDAQ: NFLX) after the company back peddled on its decision to split its' services among two companies.

In the report, Morgan Stanley writes, "By recanting its decision to create two semi-autonomous brands (one for DVD-by-mail and another for its growing streaming business), Netflix is not only showing its sub base a “good faith gesture” but it is also back to leveraging one of its most powerful assets, its cross-platform recommendation algorithm. We believe this is a step in the right direction for the business model and should be viewed favorably by the market."

Morgan Stanley maintains its Equal-weight rating on Netflix, which closed Friday at $117.21.