How Will Symantec (SYMC) Stock Be Affected By This Downgrade?

NEW YORK (TheStreet) -- Shares of Symantec Corp. (SYMC) are down -1.14% to $22.64 in pre-market trade after the security firm was downgraded to "market perform" from "outperform" at BMO Capital Markets

However, BMO raised their price target to $23, "which reflects 10x FY2015 FCF as well as our detailed sum-of-the-parts analysis," BMO said.

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

"We rate SYMANTEC CORP (SYMC) a BUY. This is driven by several positive factors, 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 growth in earnings per share, notable return on equity, attractive valuation levels, expanding profit margins and increase in net income. 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:

  • SYMANTEC CORP has improved earnings per share by 14.8% 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 year. We feel that this trend should continue. During the past fiscal year, SYMANTEC CORP increased its bottom line by earning $1.27 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.27).
  • 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 Software industry and the overall market, SYMANTEC CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for SYMANTEC CORP is currently very high, coming in at 88.18%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SYMC's net profit margin of 13.15% significantly trails the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the Software industry average, but is less than that of the S&P 500. The net income increased by 14.2% when compared to the same quarter one year prior, going from $190.00 million to $217.00 million.
  • You can view the full analysis from the report here: SYMC Ratings Report

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