NEW YORK (TheStreet) -- Brocade Communications Systems (BRCD) stock is up by 5.87% to $9.10 on heavy trading volume Tuesday afternoon, following Friday's announcement that it has completed its $1.2 billion acquisition of Ruckus Wireless (RKUS).
Goldman Sachs (GS) has consequently increased its price target to $10 from $9 on the stock.
The firm expects per-share earnings dilution of 6 cents during 2016, "as the company noted that it would be making incremental opex investments to be able to sell the Ruckus portfolio into its customer base."
But the transaction is expected to be accretive to per-share earnings by 14 cents by 2017, Goldman Sachs noted.
Brocade is a San Jose, CA-based communications and networking company.
About 16.73 million shares have been traded so far today vs. its average trading volume of roughly 6.79 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B-.
Brocade's strengths such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: BRCD
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.