UBS Upgrades Symantec, Says RemainCo Consumer Franchise Seems Undervalued
Amidst sweeping executive and strategic changes at Symantec Corporation (NASDAQ: SYMC), the market seems to have overlooked the “steadiness” of the “RemainCo” Consumer franchise, according to UBS.
The Analyst
UBS analyst Fatima Boolani upgraded Symantec from Neutral to Buy, while raising the price target from $23 to $27.
The Thesis
Symantec has closed the sale of its Enterprise business, which contributed 50% of total revenue and 10% of EBIT. The company is scheduled to report earnings on Wednesday, and “we see catalysts for investors to revisit a cleaner, more profitable, and more focused business at an attractive multiple,” Boolani said in the note.
Following the Enterprise business divestiture to Broadcom Inc (NASDAQ: AVGO), Symantec has changed its name to NortonLifeLock and its dividend yield goes to an attractive 3%.
Amid these transformational changes, investors seem to be ignoring the company’s Consumer business, which seems primed to achieve management’s target of more than $1.50 per share in earnings and over $900 million in free cash flows, the analyst mentioned.
“Now unencumbered by the distracting capital intensive Enterprise business, measured reinvestments should stabilize subscriber declines,” Boolani wrote.
She added that the company has several avenues to achieve growth in average revenue per user, as it leverages its market leading position in consumer security with greater focus.
Price Action
Shares of Symantec were up 1.45% to $23.75 at the time of publishing on Tuesday.
Related Link:
Broadcom Falls, But Analysts Optimistic Chip Demand Has Bottomed And Acquisitions Will Help
Latest Ratings for SYMC
Nov 2019 | Upgrades | Neutral | Buy | |
Jun 2019 | Upgrades | Neutral | Buy | |
Jun 2019 | Downgrades | Equal-Weight | Underweight |
View More Analyst Ratings for SYMC
View the Latest Analyst Ratings
0
See more from Benzinga
Analyst Raises Price Target For Ferrari As It Races Ahead Into 2020
Wells Fargo Upgrades Marvell As Several Catalysts Seem To Be Aligning
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.