Netgear Jumps; Barclays Upgrades

Netgear (NTGR) shares rallied sharply today after Barclays Capital analyst Jeff Kvaal boosted his rating on the stock to Overweight from Equal Weight. He moved up his price target to $22, from $18; the stock closed Tuesday at $16.96.

Kvaal lifted his 2009 EPS estimate for the company to 35 cents, from 26 cents. For 2010, he goes to 90 cents, from 78 cents. That’s well above the Street, at 24 cents for the year and 78 cents for next year.

Kvaal writes that the U.S. small- and medium-sized business market is returning to normal patterns in the third quarter. He also thinks the networking segment is “faring relatively better in a mediocre back-to-school market.” Kvaal contends NTGR will benefit from new security, storage and DOCSIS 3.0 product launches in the second half.

The Barclays analyst adds that valuation is modest at 0.5X EV/sales ex-$6.50 a share in cash.

NTGR today rose $1.95, or 11.5%, to $18.91.