Brean Capital Thinks ARRIS Group's Gathering Momentum Bodes Well for Upside

In a report published Thursday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $32.00 price target on

. In the report, Brean Capital noted, “Arris has now digested Motorola and enters 2014 on the heels of accelerating momentum in 4Q13. We expect aggregate network capital investments to trend upward in 2014 and 2015, and for this increase to be the most intense in areas (video CPE, CMTS), where Arris is well positioned with next-gen offerings. We think this will translate to improving fundamentals over the course of the year and the potential for upside to our estimates. We have raised our outlook for total 2014 revenue to $4.85 billion, up from our prior estimate of $4.7 billion. "However, we are trimming our 2014 non-GAAP EPS estimate to $2.05 from our prior estimate of $2.15. This reduction reflects a $0.12-to-$0.13 negative impact from the loss of the Federal R&D tax credit, which may very well still be extended, and a modest increase in shares outstanding due to full dilution from Arris convertible debt. Excluding these items, our non-GAAP EPS estimates would actually have been up modestly.” ARRIS Group closed on Wednesday at $27.94.