Will This Downgrade Hurt Motorola Solutions (MSI) Today? (Update)

Update (9:45 a.m.): Updated with Wednesday market open information.

NEW YORK (TheStreet) -- Goldman Sachs downgraded Motorola Solutions  (MSI) to "sell" from "neutral" and set a $67 target price. The firm noted the company guided to lower sales. 

The stock was falling 3.03% to $63.78 at 9:42 a.m. on Wednesday.

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Separately, TheStreet Ratings team rates MOTOROLA SOLUTIONS INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOTOROLA SOLUTIONS INC (MSI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, increase in net income and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • MSI's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 2.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
  • Net operating cash flow has increased to $741.00 million or 31.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.97%.
  • The net income growth from the same quarter one year ago has exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 1.8% when compared to the same quarter one year prior, going from $336.00 million to $342.00 million.
  • MSI's debt-to-equity ratio of 0.67 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 1.63 is high and demonstrates strong liquidity.
  • You can view the full analysis from the report here: MSI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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