Morgan Stanley Upgrades Symantec, Believes 'Bear Case Behind Us'

Loading...
Loading...
While the execution of a restructuring program and a complex spin-off could be a difficult task, Keith Weiss of Morgan Stanley believes that the risk is already reflected in the share price of
Symantec CorporationSYMC
. Weiss upgraded the rating on Symantec from Underweight to Equal-weight, while raising the price target from $23 to $24, while stating that the schedule spin-off of Veritas for $8 billion would limit the downside risk to the stock and offer a more balanced risk/reward profile. Weiss mentioned that there had been concerns surrounding potential execution issues associated with the sale of Veritas. The impact of such issues were visible in Symantec's FQ1 results, with a 7 percent year on year decline in billings and flat revenue. However, Weiss believes that "the proposed sale of Veritas for $8B reduces distraction and leaves the remaining Symantec Security business most likely too cheap for significant downside," especially given that there are new products in the pipeline for the security business. "Symantec still has a lot of work to do to offset mature businesses across consumer, enterprise security and endpoint management, inhibiting a more aggressive view on the stock," the Morgan Stanley report stated. The company announced it has entered into an agreement with
The Carlyle Group LPCG
for the sale of Veritas. This spin-out is also expected to offer more flexibility to Symantec in the use of cash for M&A and buybacks.
Loading...
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorUpgradesPrice TargetAnalyst RatingsMorgan Stanley
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...