At least, RBC’s Mark Sue thinks so. Yesterday, Sue cut his price target for Motorola to $22 from $24. He also cut his 2007 EPS estimate to $1.18 a share from $1.20; for the first quarter he went to 20 cents a share from 21 cents. He cut his revenue estimate for the quarter to $10.2 billion from $10.6 billion.
"The mess from the [fourth quarter] is spilling into the current quarter and Motorola’s product portfolio appears to be underperfoming its peers,” Sue wrote in a research note.
Products in the channel will take some time to sell through and several more digestive quarters will be required before Motorola sees improving [operating margin] trends… Motorola’s lackluster product portfolio is also limiting [operating margin] recovery. Motorola currently has no ability to raise prices.
Sue says hot phones right now include the LG VX 8600, the Samsung Blackjack and the Sony Ericsson W810. He says the “buzz factor is high” for the LG Shine, the Research in Motion (RIMM) 8800 and the Nokia (NOK) N76. You’ll notice which company is not on the list.
Motorola shares yesterday were down 19 cents at $18.45.
MOT 1-yr chart