Adtran upgraded to Buy at Rosenblatt as growth returns

Rosenblatt upgraded Adtran (ADTN) to Buy from Neutral with a price target of $10, up from $6. Q3 revenues were slightly better than expected, driven by Subscriber Solutions, where inventory has fully normalized, and the higher Subscriber mix in Q3 makes gross margins that beat the firm’s estimate by 150 basis points “even more impressive,” the analyst tells investors. Good margins were due to operational efficiencies and lower overhead on site and product consolidation, while inline Q4 guidance calls for the first meaningful quarter-over-quarter and year-over-year revenue growth in five quarters, the analyst added.