Nomura Upgrades Motorola Solutions (MSI)

NEW YORK (TheStreet) -- Motorola Solutions (MSI) was upgraded to "buy" by analyst firm Nomura. The firm set a price target of $72 for the company.
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Motorola Solutions gained 0.3% to $64.73 in early market trading on Thursday.

The upgrade comes after Motorola Solutions announced revenue of $2.5 billion for its last quarter, up from $2.44 billion in the year-ago quarter. The company announced earnings of $343 million, or $1.31 a share, for the fourth-quarter ended December 31, from $336 million, or $1.18 a share, a year earlier.

Nomura expects Motorola Solutions to buy back more stock.

By market open, shares had gained 0.56% to $64.87.

TheStreet Ratings team rates MOTOROLA SOLUTIONS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOTOROLA SOLUTIONS INC (MSI) a BUY. This is driven by a few notable strengths, 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 impressive record of earnings per share growth, compelling growth in net income, notable return on equity, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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

  • MOTOROLA SOLUTIONS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MOTOROLA SOLUTIONS INC increased its bottom line by earning $3.01 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($4.69 versus $3.01).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 49.0% when compared to the same quarter one year prior, rising from $206.00 million to $307.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, MOTOROLA SOLUTIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • MSI's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MSI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.69 is high and demonstrates strong liquidity.

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