Analysts Remain Bullish on Motorola

So, let’s say you are an analyst. (Maybe you are.) And let’s say you’ve made a great call: recommended a stock, and it climbs right up to your price target. What do you do? Well, you can drop your rating. Or alternatively, you can find a reason to raise your price target, which gives you another reason to whip out a bullish research note.

This morning, two analysts took the second route on Motorola (MOT):

Brian Modoff, an analyst at Deutsche Bank, this morning lifted his price target for Motorola to $30 from $26. “Our channel checks indicate Motorola continues to gain share globally,” he wrote this morning. “WIth multiple products coming to market over the next few months, our contacts indicate that Motorola could see share gains of +1% [more than 1%, I think he means] a quarter for some time….We are currently estimating MOT will ship 54 million units this quarter, but now believe the company is in line to beat this figure.”

Mark Sue, an analyst at RBC Capital, raised his price target today to $28, from $26, citing “increased demand visibility for the company’s reinvigorated handset portfolio.” Sue writes that his 2007 EPS estimate of $1.43 a share “may prove conservative….Near-term, Motorola may be tracking towards the high-end of the guidance range and may handily beat our mobile devices unit estimate of 53 million…Our rating is Outperform.”

Motorola shares today have gained 57 cents to $25.42.

Comment on this article

Comments

[Tom B:]

MOT's business is fragile because the company is poorly managed and the products don't have much reach. If AAPL decided to break into cell phones. MOT would be a penny stock within 12 months, no question.

2006 Sep 19 08:59 AM

[xwallster:]

Motorola's business is fragile because of lingering structural issues from the past five years, which the
company is trying to address. Zander has done a pretty good job of focusing the company and
rebuilding its brand image in handsets, which are a part, but not all, of its business.

When Apple introduces its phone, Motorola will have some competition at a relatively high
price point, but, Apple still has to disclose its carrier strategy. Remember, the best handset in
the world will flop unless the carriers support it. Don't see a whole lot of risk to most of Motorola's
business at medium to lower price points, at least from Apple.

Lastly, a comment like "penny stock within 12 months, no question", without any supporting
quantitive analysis, would have never made it past editorial when I was on the Street. Either
back up your statement by showing how MOT's P/E would suffer asteriod-hitting-the-E...
damage, or think twice before spouting.

2006 Sep 19 09:27 AM

[Tom B:]

OK, "penny stock" was hyperbole. Stagnant, like MSFT is more likely. I also concur that signing Zander was a good move.

But do recall: this is the flea-brained company that dumped Freescale before giving them enough corporate support to grow. Freescale is now valued at something like 16B (at least, that number has been floated as an acquisition price).

2006 Sep 19 01:35 PM