UPDATE: Citigroup Reiterates Neutral Rating, Raises PT on Arris Group
In a report published Monday, Citigroup reiterated its Neutral rating on Arris Group (NASDAQ: ARRS), and raised its price target from $15.50 to $17.00.
Citigroup noted, “Raise target price to $17.00, but maintain Neutral. While acknowledging the transformational and accretive benefits of Motorola Home acquisition (revenues increase 2.6x, ARRS instantly becomes number one STB vendor), we nonetheless remain neutral due to concerns around longer term outlook of the set-top box business as well as risks around integration, cost reduction efforts, and increased leverage. Target price increases to $17.00, on 7x EV/EBITDA vs. Dec 13 – Sept 14 estimate; target multiple is at discount to current levels on increased leverage from deal but is at a modest premium to STB-focused comps.”
Arris Group closed on Friday at $15.33.
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