Moody's upgrades Netflix and says it expects 2018 to be 'negative cash flow trough'

Moody's Investors Service upgraded Netflix Inc.' debt rating by one notch on Wednesday, raising it to Ba3 from B1, but keeping it three notches into speculative-grade, or "junk," status. The move is due "to our expectations for continuing strong momentum of global subscriber and revenue growth for the intermediate-term, and our expectation that 2018 will be the negative cash flow trough for the company," the agency said in a statement. The company's credit metrics are expected to remain weak through 2019, but metrics such as the debt-to-EBITDA leverage, is expected to improve and become more consistent with the rating by 2020. Netflix shares were up 3% in afternoon trade, and have gained 112% in the last 12 months, while the S&P 500 SPX, -0.55% has gained 13%.