JPMorgan reiterated its overweight rating for TiVo shares after the U.S. International Trade Commission ruled Tuesday that Comcast's set-top boxes infringed on two patents held by Rovi, a company owned by Tivo.
"We view this ruling as a significant positive for TiVo and a major step in what we expect to be a process of the two companies working toward final resolution," JPMorgan analyst Sterling Auty wrote in a note to clients Tuesday.
"We would expect Comcast to appeal the ruling, but the importation ban will remain in effect during that process. Other potential workarounds, in our opinion, would only provide temporary relief, and we see this ban as being a strong motivator to help drive the two sides toward a new IP licensing agreement."
Tivo shares rose 7 percent Wednesday after the report, while Comcast stock declined 0.4 percent.
Auty estimates a potential settlement between the two companies will result in $90 million to $100 million "catch up" royalty payments and ongoing new annual licensing revenue from Comcast to TiVo.
The analyst has a $34 price target for TiVo shares, representing 93 percent upside to Tuesday's close.
A Rovi spokesperson sent the following statement by email in response to a request for comment:
"Rovi is pleased the International Trade Commission issued its final ruling in our favor and found that two Rovi patents are valid and infringed by Comcast's X1 products, and issued an exclusion order that bans Comcast from importing and selling X1 devices that infringe our valuable intellectual property ... Commission Opinion reinforces the need for Comcast to take the necessary licenses to our IP."
Comcast replied with this emailed statement:
"We respectfully disagree with the ITC's decision in this matter. In fact, Rovi has never disputed that Comcast or its predecessors independently developed our X1 platform and our cloud- and app-based technology. While we believe the ITC reached the wrong decision, we will remove this feature from those offered to our subscribers while we pursue an appeal."
Disclosure: Comcast owns CNBC parent NBCUniversal.