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UPDATE: Citi Upgrades Motorola Solutions

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In a report published Tuesday, Citi analyst Jeremy David upgraded Motorola Solutions (NYSE: MSI) to Buy from Neutral, raising its price target to $75.00 from $65.00.

According to the report, the upgrade reflects the analyst's belief that additional buybacks to the tune of $1.5B are possible based on a likely ~$2B+ improvement in the funding status of MSI's U.S. pension plans at the end of 2013.

“We believe the pension liability could decline to as low as $0.5B at the end of 2013 from $2.8B at the end of 2012 as higher interest rates likely lowered the benefit obligation to $6.5B from $8.3B at the end of ‘12, while the strong ‘13 equity returns likely boosted plan assets (64% invested in equities) to ~$6.0B from $5.4B, freeing up debt capacity,” the report noted. “We model $1.5B in incremental debt to finance $2.2B/ $1.5B in share repurchases in '14/ '15, up from our prior $1.7B/ $0.5B estimates.”

Some highlights from the report included: -We are increasing our 2014 revenue estimate by $68M to $8,995M (+3.7% y/y) on the enterprise recovery and our 2014 EPS estimate by $0.16 to $4.39 -MSI is likely to provide prudent annual guidance for 2014

MSI closed Friday at $67.36 with shares trading up at 1.91 percent.

Latest Ratings for MSI

DateFirmActionFromTo
Sep 2019MaintainsUnderweight
Aug 2019Initiates Coverage OnOverweight
Aug 2019ReiteratesOutperform

View More Analyst Ratings for MSI
View the Latest Analyst Ratings

Posted-In: Citi Jeremy DavidAnalyst Color Upgrades Price Target Analyst Ratings

 

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