CS First Boston Lowers Motorola to 'Neutral'
Credit Suisse First Boston downgraded Motorola (MOT ) to neutral from outperform.
On Monday Motorola said it plans to acquire the balance of Next Level Communications it currently doesn't own for $1.04 per share in cash. The company has a 74% stake in Next Level.
Analyst Tim Long says the fundamental risks outweigh the potential rewards at the current valuation. Long thinks shipments may decline more than the overall industry into March. He thinks average selling prices also could come under more pressure than rivals given Motorola's exposure to China, aggressive discounting, and its product mix. He also thinks semiconductor revenues could come under pressure.
Long says Motorola is steadily losing market share in the wireless infrastructure area, and that the broadband market continues to falter. He's keeping his 40 cents 2003 earnings per share estimate, but sees a greater chance of a cut than increase. He lowered his $11 target to $8.
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