- "With fundamentals strengthening, and estimates likely to be revised upwards, we see the potential for further upside," says Brean's Todd Mitchell. He's raising his target for Arris (ARRS +1.3%) by $7 to $40 ahead of the set-top/cable infrastructure vendor's Thursday Q2 report.
- Mitchell expects U.S. cable capex to "maintain an upward trend for the remainder of 2014 and into 2015." He also sees evidence Arris is "reinvigorating" recently-acquired Motorola Home's telco and international distribution, and helping the unit regain lost share.
- Moreover, Arris is expected to continue aggressively paying down debt - thanks to the Motorola deal, Arris had $1.7B in debt at the end of Q1 - and is deemed "well-positioned" to make new "accretive acquisitions of high value-add technology companies."
- Shares now +41% YTD. They soared in May following a strong Q1 report,