Telecom & Wireless
A Surprise Upgrade of Motorola (MOT, PALM)
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If you can believe it, an analyst is raising the rating on Motorola Inc. (NYSE: MOT). It is not even a boutique brokerage firm. Bank of America Merrill Lynch has raised its official rating to “Buy” from “Neutral.”
The price target is also almost as hard to believe. The prior target was $7.00 and the new target is $9.00. Based upon a $6.03 close Monday, that is almost a 50% projected upside.
B of A believes that Motorola is having at least some success with new handset sales to carriers.
After we took a look at the books, the cash balance is close to $2.00 per share before you get into receivables and other hard assets, but the stock still looks to trade at close to 3-times a tangible book value.
Most analysts are still expecting losses on a net basis for 2009, but see a return to earnings in 2010.
If Palm, Inc. (NASDAQ: PALM) can find salvation in a single phone, maybe Motorola can come out of retirement for one more fight too.
Jon C. Ogg
June 23, 2009
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