Brean Capital Believes Shares of Rovi Corporation Deserve a Second Look

In a report published Monday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $27.00 price target on

. In the report, Brean Capital noted, “We look for Rovi to report in-line results for 2Q14 and are increasingly confident that the company's painful resets are a thing of the past. With Rovi in the penalty box after missing and guiding downward several times over the past two years, we believe upside for the stock lies first and foremost in delivering on its 2014 guidance, which has numbers getting stronger in 2H14 than 1H14. Assuming the company achieves this stabilization, we see growth in 2015 from the company's Service Providers segment with the expansion of TV Everywhere use cases and an uptick in licensing fees from Spin Co., although there will be continued pressure from the phasing out of ACP revenue. Sources of upside include increased traction in its cloud service offering following the full digestion of Veveo and expansion of its metadata footprint, but the real kicker comes from large Service Provider renewals in 2016 and 2017, which, if achieved, are likely to result in a rerating of the company's risk profile and significant upside to current estimates and target price. We reiterate our Buy rating and $27 price target.” Rovi Corporation closed on Friday at $23.43.