Symantec (SYMC) Dips Lower on Analyst Downgrade

NEW YORK (TheStreet) -- A Morgan Stanley downgrade could see Symantec (SYMC) shed losses over Monday's session. In pre-market trading, shares had dropped 2.2% to $22.95.

Morgan Stanley downgraded the tech giant to "underweight" with a $21 price target on the view the company is in flux and could see sales disruptions. 

TheStreet Ratings team rates SYMANTEC CORP as a Buy with a ratings score of B-. The team has this to say about their recommendation:

"We rate SYMANTEC CORP (SYMC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 27.5% when compared to the same quarter one year prior, rising from $189.00 million to $241.00 million.
  • Net operating cash flow has slightly increased to $191.00 million or 7.30% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.97%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SYMANTEC CORP has improved earnings per share by 25.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SYMANTEC CORP reported lower earnings of $1.05 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.77 versus $1.05).

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