Motorola: Could it get any worse?
Posted
Jun 23 2008, 03:00 PM
by
Kim Peterson
Rating:
Motorola shares hit a five-year low today after analysts weigh in with negative reports. The stock is down nearly 6% to $7.48 at noon PST. Don't listen to that inner voice whispering that now might be a good buying opportunity. Things aren't looking up for this company anytime soon.
PiperJaffray downgraded Motorola to "sell" from "neutral" today and cut the price target to $7 from $9.75. The analyst also lowered his handset forecast for the year to 106 million from 116 million. Part of the reason for the downgrade is because Motorola is so exposed in North America. Nearly half of its handset sales are on that continent. So it's not a good sign that the four major North American wireless carriers are seeing declining sales.
A Deutsche Bank analyst suspects Motorola will be hurt by consumers putting off new cell phone purchases in order to pay for basic items like gas and food, according to Barron's. The analyst said Motorola's near-term is "bleak," and cut his target on the stock to $12 from $13. The analyst also said Motorola's share of the global handset market this year will drop to 6.1% from 8.1%.
Motorola wants to spin off its handset division, but PiperJaffray says that move is unlikely in the near-term.
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