Analyst Upgrades Motorola on New Phones, Economy
Motorola Inc. continues to get good reviews from analysts for its efforts to turn around its cell phone business. A Macquarie Securities analyst upgraded the stock to "Outperform" from "Neutral" on Wednesday.
"Motorola is entering a solid product cycle," analyst Phil Cusick wrote. It has new smart phones with Google Inc.'s Android software coming in the fourth quarter, with T-Mobile USA being the first announced U.S. carrier partner.
Motorola shares were unchanged at $9.20 by midday Wednesday after rising to a 52-week high of $9.45 earlier in the session. Cusick noted that the stock has risen considerably — it has doubled since April — but said it has room to grow. He set a $11 target price.
An economic recovery will help the non-handset business, Cusick wrote. It accounts for two-thirds of Motorola's sales.
Motorola demonstrated the new T-Mobile smart phone last week. It is the first in a series of phones that it hopes will let it take up the competition with Apple Inc.'s iPhone and Research in Motion Ltd.'s BlackBerrys. Motorola's handset business has been floundering since its last hit phone, the Razr, came out four years ago.
More important than the T-Mobile phone will be the as-yet-unrevealed one to be launched by Verizon Wireless , Cusick said. Verizon sells three times as many phones as T-Mobile USA, and is in sore need of a smart phone to keep people from going to AT&T Inc. , the exclusive iPhone carrier in the U.S.