Arris should pull in $675 million in sales in 2018 from its just-completed acquisition of the Ruckus Wireless and ICX Switch business from Broadcom, Raymond James analyst Simon Leopold estimated in note issued Friday.
That’s in the middle of Arris’s prior expectations that sales from the deal would contribute $650 million to $700 million next year. Leopold also expects the acquisition to contribute 27 cents to its 2018 earnings per share estimates.
Of Leopold’s estimated contribution next year, he sees $305 million coming from WLAN, $228 million from sales of campus switches, and $142 million for related services.
Leopold also reiterated a “Strong Buy” on Arris shares, and a price target of $38.
“We believe ARRIS’ stock is not adequately appreciated and believe the accretion along with improving diversification could help the stock,” he wrote.
Closing the deal didn’t do much for Arris’s stock today. Shares closed Friday at $29.68 each, down 29 cents (0.97%).
Leopold said he will reassess the firm’s assumptions on Arris following a call slated for December 14 that will provide an update on the acquisition.