Downgrades pour in for Symantec following CEO's firing

|About: Symantec Corporation (SYMC)|By:, SA News Editor

Symantec (SYMC -13.6%) will now "face another multi-year period of upheaval, management turnover and strategic uncertainty as it tries to reposition and transform a largely legacy business of security and infrastructure software and services," thinks MKM's Israel Hernandez, downgrading shares to Sell.

Hernandez also thinks finding "a willing and capable CEO" to replace the fired Steve Bennett will be tough, expects executive turnover (already an issue) to pick up, thinks the company will be hard-pressed to hit its 5% FY17 growth target, and believes steep valuations and buyback/dividend commitments will make growing via M&A tough.

Altogether, 7 firms have downgraded Symantec today. Cowen, which has cut shares to Market Perform, says it now has less confidence in Symantec's long-term margin targets. Jefferies, lowering shares to Hold, thinks weakening internal morale/execution is a risk.

Shares now only go for 8.4x FY15E (ends March '15) EPS after factoring net cash, a valuation well below that of most enterprise software peers. A contrarian buying opportunity or a value trap?

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