Netflix Higher After Barclays Upgrade to 'Equal Weight'

Shares of Netflix Inc rose modestly in premarket trading on Friday after Barclays upgraded the online movie renter to "equal weight" from "underweight," citing the benefit of overseas expansion.

The upgrade is a vote of confidence in Netflix, which has long been plagued by charges it is overvalued. StarMine's measurement of intrinsic value, which looks at anticipated growth over the next decade, indicates Netflix is one of the most overvalued names in the S&P 500, calculating it should be trading at $99.27, about a fifth of its current price. In premarket, Netflix was up 0.8 percent at $485.30.

Still, the stock is a favorite for traders and a long-time "momentum" bet, meaning investors are playing it for its future growth prospects as much as its current fundamentals.

Barclays wrote that based on the company's international growth plan, "we believe our estimates are likely achievable and now see the upside/downside to subscriber growth as more balanced."

The firm noted that Netflix was launching its service in France and Germany in the next two weeks: "Over the next few months, we will be closely watching penetration rates in these regions as, in our view, the crux of Netflix's current valuation rests on the success of their product there."

For the year, Netflix is up more than 30 percent, outperforming the S&P 500 by a factor of more than three. This comes after a jump of nearly 300 percent in 2013.