CommScope stock rating upgraded by Morgan Stanley on debt reduction plan

Investing.com - Morgan Stanley (NYSE:MS) upgraded CommScope Holding (NASDAQ:COMM) from Underweight to Equalweight on Tuesday, raising its price target to $17.00 from $4.00. The stock has shown remarkable momentum, surging 74% in the past week and 620% over the last year, according to InvestingPro data.

The upgrade follows CommScope’s recent sale of its remaining marketable assets at what Morgan Stanley describes as "a substantial premium to traditional trading ranges," enabling the company to address its significant debt burden.

The transaction proceeds will allow CommScope to repay all outstanding maturities and redeem all outstanding preferred equity, effectively removing the debt overhang that had previously challenged the company’s equity story.

Morgan Stanley noted that rising AI valuations have improved CommScope’s prospects, particularly as benchmarks for the company’s Connected and Cable Solutions (CCS) segment increased in value.

The research firm believes the current stock price already reflects near-term upside potential, while acknowledging that CommScope’s remaining assets face longer-term challenges despite having near-term catalysts.

In other recent news, CommScope reported second-quarter results that significantly exceeded analyst expectations, with strong performance across all business segments. This impressive earnings report coincided with the announcement that Amphenol (NYSE:APH) will acquire CommScope’s Connectivity and Cable Solutions segment for approximately $10.5 billion in an all-cash transaction. CommScope expects to receive net proceeds of about $10 billion after taxes and transaction-related expenses from this deal, which is pending shareholder approval and is anticipated to close in the first half of 2026.

Following these developments, Raymond (NSE:RYMD) James upgraded CommScope’s stock rating from Underperform to Outperform, setting a price target of $19.00. The firm cited improved fundamentals for CommScope, attributed to post-pandemic inventory normalization and cable TV upgrades. Meanwhile, Amphenol’s stock experienced a jump after the acquisition announcement. These recent developments reflect significant strategic moves and financial performance for both companies.

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