Barclays Calls ARRIS Group, Corning 'Two Of The Cheapest Stocks We Cover'

Joseph Wolf and Brian Finneran, analysts at Barclays, released their 2016 outlook for U.S. emerging technologies, highlighting ARRIS Group, Inc. (NASDAQ: ARRS) and Corning Incorporated (NYSE: GLW) as attractive value stocks, as both are trading at discounts to their three-year average P/E.

ARRIS Group: Overweight, $41 PT

"Our Top pick for 2016 is ARRS given its valuation and recent closure of Pace in 1Q16. Expansion of broadband services and improved Wi-Fi will continue to drive investment in the network," the firm commented on ARRIS.

Related Link: Arris Completes Pace Acquisition

Barclays believes that ARRIS has a strong pipeline for growth, as demand for improved WiFi and an improved house integration platform may allow the company to increase their top line while expanding market share. Furthermore, analysts predict that increasing the scale of the company will allow for significant cost-cutting, further driving margins higher.

Corning Incorporated: Overweight, $22 PT

Regarding Corning Incorporated, the Barclays analysts stated, "The capital return and focusing of the portfolio keep us positive while we await accelerated growth."

The note continued, "Our model calls for [...] 11 percent EPS growth as GLW continues to repurchase its stock [...] while continuing to gain momentum with Gorilla Glass in the automotive market."

Barclays sees positive-growth trends for Corning, including in the Optical and Gorilla Glass product line, which have generated significant cash flow in the past and are expected to continue thusly, forward into 2016. Furthermore, Barclays believes Corning can increase the efficiency of their business operations, which has the potential to increase margins and drive a higher share price in the coming year.

At The Time Of This Publication...

• ARRIS Group was trading at $27.36, down 3 percent.
• Corning was trading at $17.25, up 0.85 percent.

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