Porn Valley [Business Week]- Shares of New Frontier Media Inc. rose Tuesday after an analyst upgraded the stock, saying the adult entertainment producer and distributor continues to broaden its audience.

Roth Capital Partners analyst Richard Ingrassia lifted his rating to “Buy” from “Hold” and raised his price target to $12 from $10.50.

“Though competitive concerns and pricing pressure remain high, New Frontier’s more diverse library should provide relative stability in the long term and opportunities for international growth,” he wrote in a client note.

Ingrassia also said it is likely the company will expand internationally after acquiring adult entertainment producer and distributor MRG Entertainment Inc. for $15 million in cash and $5 million in stock.

“Because MRG provides an established international presence and better visibility into consumer tastes in European territories, New Frontier will now more confidently acquire foreign distribution rights from its existing stable of U.S. producers,” Ingrassia wrote.

Meanwhile, the company shows resilience to economic downturns, he said. “In fact,” he wrote, “buy rates tend to improve during periods of economic uncertainty.”

Shares of New Frontier rose 61 cents, or 6.9 percent, to $9.45 in afternoon trading on the Nasdaq Stock Market.