UPDATE: Brean Capital Reiterates Buy Rating, Raises PT on Rovi Corporation on Multiple Paths to Higher Per-Share Valuation

In a report published Monday, Brean Capital analyst Todd Mitchell reiterated a Buy rating on

, and raised the price target from $22.00 to $27.00. In the report, Brean Capital noted, “Rovi has done its final reset, and we believe its earning power is not fully reflected in its current valuation. The pacing of upcoming Service Provider renewals in 2015 and 2016 points to high-teens EPS growth through 2017, off a $1.80 base in 2014. Moreover, an upside scenario is supported by 2015 licensing of OTT providers, which is not in our current estimates, and we see a growing value proposition in Rovi's Cloud Services approach, which could support even further upside to our outer-year estimates. Rovi has an inefficient capital structure, but pays next to no taxes for relatively high EBITDA to FCF conversion. With multiple scenarios for upside to our estimates, and sufficient cash on hand and FCF projected to pay down debt, and/or aggressively repurchase its own shares, we see multiple paths to higher per-share valuations. As a result, we are raising our target price for ROVI to $27 from $22, and we reiterate our Buy rating.” Rovi Corporation closed on Friday at $21.29.