By Dhirendra Tripathi
Investing.com – NortonLifeLock (NASDAQ:NLOK) stock traded 4.5% lower Tuesday after Morgan Stanley (NYSE:MS) downgraded it to ‘equal-weight’ with a target of $28.
The stock has traded at a low of $26.47 so far in the session that’s still underway.
According to StreetInsider, the brokerage sees “limited catalysts” for the cybersecurity company.
"Slowing topline and macro suggest downside risk to FY23 consensus revenue estimates, while NortonLifeLock faces an uncertain regulatory path for closing the proposed Avast transaction,” analyst Hamza Fodderwala wrote in a note.
Earlier this month, Britain's anti-trust regulator said the company’s proposed $8.6 billion purchase of Avast needed a deeper probe owing to competition concerns.
The Competition and Markets Authority said the deal could lead to British customers getting a worse deal when looking for security software.
The CMA's findings are based on an initial investigation, and the regulator has called on the companies to submit proposals to allay its concerns or face an in-depth probe, according to a Reuters report earlier.
NortonLifeLock had then said it did not plan to propose any remedies. It called the CMA's decision "surprising."
Under the deal announced in August, Avast shareholders were to get a mix of cash and newly issued shares. NortonLifeLock expected the merger to result in cost savings of $280 million.
If the deal fructifies, the new company will serve more than 500 million users including around 40 million direct customers.