UPDATE: Goldman Sachs Upgrades ADTRAN on Multiple Catalysts Ahead

In a report published Thursday, Goldman Sachs analyst Simona Jankowski upgraded the rating on ADTRAN ADTN from Neutral to Buy, and raised the price target from $20.00 to $28.00.

In the report, Goldman Sachs noted, “We upgrade ADTN to Buy from Neutral as we believe the company is uniquely positioned to benefit from a multi-year access infrastructure upgrade cycle as carriers use DSL vectoring technology and fiber to compete with Google Fiber and cable providers in an emerging broadband ‘arms race'. Following consolidation and retrenchment by competitors, we believe ADTN is also set to gain share. Its shares were down 7% after reporting a stronger-than- expected 2Q and guiding 3Q sales well above consensus, as gross margin guidance disappointed. We would use the pullback to buy the stock, as we expect a 3yr EPS CAGR of 25% (consensus at 14%), reflecting significant upside to estimates.”

ADTRAN closed on Wednesday at $23.47.