Motorola's ( MOT) profit warning was followed by a slew of negative comments from Wall Street analysts Friday, and at least some experts believe the tough times won't be limited to the latter part of 2006. Deutsche Bank downgraded Motorola to hold from buy and cut its price target on the Illinois-based phone maker by $8 to $22. The firm said it was worried about a growth slowdown in mobile phones and increasing competition that will make the company decide between market share and pricing in the quarters ahead. Piper Jaffray downgraded the stock to market-perform from outperform and reduced its price target to $20 from $27. Piper also speculated that it might be several quarters before Motorola's handset operating margins recover. CIBC cut Motorola to sector-performer from outperformer, Bear Stearns took it to peer-perform from outperform, and Oppenheimer lower the stock to neutral from a buy. Credit Suisse lopped $6 off its old target and now has a goal of $24 on the stock. The firm also cut its earnings estimates for last year and this year. In addition, Credit Suisse said Motorola might offer a cautious forecast on the first quarter when it reports its fourth-quarter results later this month.
Meanwhile, even though Jefferies lowered its target by $3 to $27, it says investors might consider buying the shares amid a selloff. Finally, JMP Securities initiated Motorola with an underperform rating and a $19 target, saying it believes the company's stock will lag behind the overall technology arena, and Citigroup downgraded it to hold from buy. Motorola said late Thursday that it expects to earn 13 cents to 16 cents a share for the quarter ended Dec. 31, badly missing the 39-cent Thomson Financial analysts' consensus estimate. The company estimated that its sales totaled around $11.7 billion for the quarter, short of the $12 billion analysts' consensus. Shares of Motorola were recently losing 7.6% to $18.99.