Zacks Investment Research upgraded shares of Arris Group Inc. (ARRS) from NEUTRAL to OUTPERFORM on February 25, 2013, with a target price of $21.00.
We are upgrading our recommendation on Arris Group to Outperform backed by the company's decision to acquire the cable set top box business of Motorola Mobility. We believe the proposed acquisition will transform the company as an integrated equipment supplier in the high-speed video and Internet delivery market. Both the top and the bottom lines of Arris are expected to benefit immensely from this acquisition. Initial market traction for Moxi gateway, E6000 converged edge router and Assurance software are encouraging. Arris continues to benefit as several cable TV operators are upgrading their own customer premises equipment with high-speed DOCSIS 3.0, and it has a healthy order backlog. Although the company's fourth quarter of 2012 financial results fell below the Zacks Consensus Estimates, management provided a strong outlook for the ensuing first quarter of 2013.
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