UPDATE: Brean Capital Reiterates on Arris Group Following News of Comcast/Time Warner Deal

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

, and raised the price target from $26.00 to $32.00. In the report, Brean Capital noted, “The investment case for Arris lies in a reinvigoration of the acquired Motorola consumer premise equipment (CPE) business from the deployment of home gateways to support the transition to TV Everywhere (TVE) service profile. We think a Comcast-TWC tie-up enhances this thesis, albeit modestly. Arris has historically strong relationships with both Comcast and TWC, and we think it is fair to assume that Arris would have captured a significant share of both operators' business. We note, Comcast is on the verge of deploying Arris' XG1 home gateway as its next-gen video CPE, and TWC had signaled its intention to deploy similar hardware, and it was assumed Arris was well positioned to win this business. On the one hand, we believe a Comcast-TWC tie-up cements Arris' position as a CPE vendor of choice for the combined entity, although it is unclear if it accelerates the spending of both entities on a combined basis. However, on the other hand, we think Comcast is less likely than TWC to open up its network to CPE competition from third-party CE providers like Apple (AAPL, $535.92, not rated), and it is likely to spur increased spending on CPE from Arris' telco customers by upping the competitive dynamics in the marketplace, both of which we would view as positive dynamics for Arris.” Arris Group closed on Wednesday at $25.90.