Zacks Investment Research upgraded shares of ADTRAN Inc. (ADTN) from NEUTRAL to OUTPERFORM on July 05, 2013, with a target price of $30.00.
We are upgrading our recommendation on ADTRAN to Outperform ahead of its second quarter of 2013 financial results. ADTRAN continues to perform creditably despite a challenging business environment. The company is facing double-edged problems: (1) the communications equipment industry is currently going through a volatile phase due to uneven capital spending of telecom carriers and (2) increasing competitive pressure within the industry. In the last reported quarter, ADTRAN stabilized its businesses with the U.S. Tier 1 carriers, while generating contracts from several Tier 2 carriers. The Enterprise division also complemented with strong sales of IP gateway and switch products. Looking ahead, we expect the company to benefit from market share gain, new product offerings, solid international sales and growing service revenues. We believe that free cash flow will also remain steady in the near future.
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