UPDATE: Nomura Initiates Coverage on Symantec on Market Leader Position

In a report published Wednesday, Nomura analyst Frederick Grieb initiated coverage on

with a Neutral rating and $29.00 price target. In the report, Nomura noted, “Symantec is a leading vendor in the security and storage markets, but has struggled to grow market share post its 2005 acquisition of VERITAS. The company has faced competitive pressures in its core markets, with ‘freemium' antivirus software pressuring the consumer business, while the storage business has been challenged by enterprise migration to Windows and Linux from Solaris and UNIX. Despite these headwinds, we are launching coverage of Symantec with a Neutral rating, as we believe management will be able to improve the business by increasing margins (perhaps to +33%) and longer-term organic growth through a combination of simplifying management structures and a better strategy to incentivize the sales force. However, given the stock's 33% increase YTD, due in part to multiple expansion (P/E up 18% YTD), we believe much of the upside from this turnaround is already baked in.” Symantec Corporation closed on Tuesday at $25.30.