UPDATE: Goldman Sachs Initiates Coverage on CommScope as Deleveraging and Wireless Exposure Drive EPS

In a report published Wednesday, Goldman Sachs analyst Mark Delaney initiated coverage on

with a Buy rating and $19.00 price target. In the report, Goldman Sachs noted, “We initiate coverage of CommScope with a Buy rating and a 12-month price target of $19 (12% upside). We expect CommScope's EPS to benefit by 5-10% yoy from deleveraging alone in 2014 and 2015, which we believe positions it well to outperform in the mid- to later stages of the cycle. We see 3 key reasons to buy shares: (1) We believe CommScope will use FCF (in the mid- to high single digits as a percent of revenue) to deleverage from 4X pre-IPO to 2X in early 2016. CommScope has successfully reduced debt in the past. (2) CommScope should benefit from LTE and small-cell DAS spending. (3) Valuation is reasonable in our view at 11X normalized EPS.” CommScope closed on Tuesday at $16.96.