Motorola Solutions Downgraded - Analyst Blog
05 Ottobre 2011 - 6:17PM
Zacks
We downgrade our recommendation on Motorola Solutions
Inc. (MSI) to Neutral based on its current valuation,
which soared nearly 34% last year. Moreover, a recent Wall
Street Journal report stated that the U.S. regulatory
authorities are at present investigating whether the company
adopted any unfair means to do business in the European
regions.
The U.S. Justice Department and the Securities and Exchange
Commission have asked the company to provide information regarding
transactions in seven European countries over the past two
years.
Nevertheless, thecompany remains the market leader in the
lucrative U.S. Public Safety market. While the federal budgetary
pressures will continue, the state and local level agencies have
become a major growth driver for Motorola Solutions.
The company’s business model remains compelling and we believe
the company will be able to maintain its current top-line growth in
the future, primarily due to the critical nature of the public
safety network in the U.S. and massive growth potential in the
Middle East. Motorola Solutions boasts a healthy cash flow.
In April 2011, Motorola Solutions completed the pending sale of
wireless infrastructure assets to Nokia Siemens Networks for $975
million. Nokia Siemens Networks is a 50-50 joint venture between
Nokia Corp. (NOK) and Siemens AG
(SI). Further, the company entered into an agreement with Vector
Capital to sell its Point-to-Point (Orthogon) and
Point-to-Multipoint (Canopy) wireless infrastructure assets.
However, the financial terms were not disclosed. We believe further
disinvestment of wireless broadband assets is a move on the part of
Motorola Solutions to concentrate more on its core public safety
businesses.
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
SIEMENS AG-ADR (SI): Free Stock Analysis Report
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