ARRIS Group (ARRS): Back End Transmission Gear Could Drive Upside - Jefferies
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Jefferies analyst, George Notter, reiterated his Buy rating on shares of ARRIS Group (NASDAQ: ARRS) after attending the SCTE Cable-Tec trade show in Philadelphia. Conversations with ARRIS management and industry contacts indicate that Cable’s multi-year investment cycle in network infrastructure is just beginning. ARRIS stands to benefit from the significant investment by Cable MSOs as they upgrade to next-generation networks.
Transmission gear is required to push fiber deeper into Cable MSOs' outside plant / HFC networks; it’s an enabler of higher speed broadband services. Based on recent conversations with industry contacts, the analyst is aware of at least several major cable MSOs that are starting the transformation of their HFC networks right now. Comcast, for example, currently has a 4-5 year project getting underway. Elsewhere, our contacts indicate that Cox is working on a 10-year program to build out its HFC plant and Liberty Global is very active.
No change to the price target of $34.
Shares of ARRIS Group closed at $27.90 yesterday.
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