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UPDATE: Citi Upgrades Motorola Solutions


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

Sep 2019MaintainsUnderweight
Aug 2019Initiates Coverage OnOverweight
Aug 2019ReiteratesOutperform

View More Analyst Ratings for MSI
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Posted-In: Citi Jeremy DavidAnalyst Color Upgrades Price Target Analyst Ratings


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