NDS Upgraded to 'Top Pick' by RBC

NDS Group (NNDS) shares are up sharply after RBC Capital’s Daniel Meron upgraded shares of the cable industry equipment provider to “Top Pick,” from Outperform, with a price target of $66.

Meron notes that the company’s valuation has “contracted materially” recently, but that “fundamentals remain strong and outlook is promising.” He says the June 2009 fiscal year is “shaping up to be another good year following a streak of deals and expanding subscriber base in emerging markets.”

He also contends NDS is a good relative defensive play given “good recurring revenue, long project cycle and underlying secular growth.” He says that the stock as of last night’s close looked cheap, at 16x his FY ‘08 EPS estimate, and 14x ‘09. He sees FY ‘08 EPS of $2.77, rising to $3.20 in ‘09.

NDS shares Thursday have jumped $2.35, or 5.3%, to $46.36.