Motorola Downgraded By a Slew of Sell-Side Analysts

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Motorola Inc.’s (MOT) warning that first quarter results will disappoint due to weaker-than-expected results for its handset business, helped drive the stock down further to a new 52-week low on Thursday.

RBC Capital Markets downgraded its rating on Motorola to “sector perform” from “outperform” and lowered its price target by US$3 to US$19, saying it does not expect a recovery this year.

“Samsung and Ericsson may have the upper hand this year in terms of their ability to gain market share,” analyst Mark Sue said in a note to clients.

Citigroup analyst Daryl Armstrong lowered his price target from US$22 to US$20 with a “hold” rating, saying it appears that Motorola’s competitors are attacking the company when it is down.

“We think Samsung is hurting them in the mature markets and Nokia in the emerging ones,” he said in a research note.

Goldman Sachs lowered its target price to US$16 from US$18, while Deutsche Bank is even more bearish on Motorola, lowering its price target to US$15 from US$19.

The firm reiterated its opinion that the company has plenty of work ahead of itself if it wants to return to health.

Deutsche Bank also said Palm shares will come under pressure as the market should now better recognize that a potential merger between the two is “extremely unlikely to take place.”

An acquisition of Palm by some other company is already fully reflected in its share price and the possibility of a premium being paid is unlikely, the firm said in a research note.

MOT 1-yr chart:

MOT 1-yr chart

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