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Chicago, Illinois-based Motorola Solutions, Inc. (MSI) provides public safety, government, defense, and enterprise security solutions. It is valued at a market cap of $66.2 billion.
This tech company has considerably underperformed the broader market over the past 52 weeks. Shares of MSI have declined 6.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 24.3%. Moreover, on a YTD basis, the stock is up 3.3%, compared to SPX’s 8.1% rise.
Zooming in further, MSI has also notably lagged the State Street Technology Select Sector SPDR Fund (XLK), which soared 47.7% over the past 52 weeks and 20.3% on a YTD basis.
On May 7, MSI posted stronger-than-expected Q1 results, yet its shares dropped 11.4% in the following trading session. The company’s revenue increased 7.4% year-over-year to $2.7 billion, topping analyst estimates by a slight margin. Moreover, its adjusted EPS of $3.37 came in 3.7% ahead of consensus expectations. Despite the earnings beat, investor sentiment turned negative amid concerns over margin pressure and ongoing supply chain challenges.
For the current fiscal year, ending in December, analysts expect MSI’s EPS to grow 11.7% year over year to $15.25. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a "Strong Buy," which is based on 10 “Strong Buy,” two “Moderate Buy,” and two "Hold” ratings.
The configuration is slightly more bullish than two months ago, with nine analysts suggesting a “Strong Buy” rating.
On May 11, Barclays analyst Tim Long maintained an “Overweight” rating on MSI and raised its price target to $509, indicating a 28.6% potential upside from the current levels.
The mean price target of $510.18 suggests a 28.9% premium to its current price levels, while its Street-high price target of $530 implies a 33.9% potential upside.
