Credit Suisse analyst Sami Badri upgraded CommScope to Outperform from Neutral with a price target of $17, up from $11. Driven by “significant” multi-year government funding to accelerate broadband and connectivity infrastructure, CommScope is “indexed to multi-year tailwinds in its core product segments,” Badri tells investors in a research note. When combining the dollar amounts of announced government programs, the analyst finds that $2.2B per year will be made available over each of the next five years for broadband infrastructure equipment providers. Badri believes CommScope is likely the key multiyear beneficiary of this funding due to its product set relevance to broadband projects. Additionally, sector channel checks with private CommScope competitors are also seeing similar high demand dynamics, including better pricing, says the analyst. Badri believes “resilient” revenue growth in an uncertain economic environment will enable CommScope to pay down debt.
previous post