Lazard Capital Reiterates Buy on Entropic Communications

Lazard Capital is out with its report today on Entropic Communications ENTR, reiterating Buy. In a note to clients, Lazard Capital writes, "Entropic is one of our top picks for the rest of the year. With the increasing interest in home connectivity, we believe the potential for an acquisition of ENTR is high. We also like the company given: 1) that the bar has been reset lower following 2Q results; we believe there is a higher chance for upside in the 2H; 2) increasing penetration of HD TV and premium pay TV subscribers which should drive 2H revenues; 3) possible upside in 2H as DirecTV seasonality subsides and it reaccelerates the ramp of MoCA based DVR boxes for HD subs and its DECA dongle for Video on Demand; this follows a soft 1H of the year; 4) growth in the CSS segment on the heels of international customer acquisitions and conversion of all DirecTV's SWM customers; 5) BRCM share loss, while a negative, is starting to play out and is clearer to investors on the impact; 6) at estimated rev and EPS growth of 32% and 35% respectively we believe that ENTR stock is attractively valued at 10x our 2012 EPS estimate." Lazard Capital maintains a $15 PT on ENTR. At the time of posting, shares of ENTR were trading at $8.27, up 0.24% from Monday's close.