Symantec’s analyst recommendations
Out of the 27 analysts covering Symantec (SYMC), only two analysts have rated the stock a “buy,” while 22 analysts rated the stock a “hold.” Three analysts have recommended a “sell.” Analysts have set a target price of $20.61 for the stock, which implies a discount of 6.6% based on its closing price of $22.06 on July 1.
In the software industry, Symantec’s market capitalization stands at $13.6 billion. Oracle (ORCL) and IBM (IBM) have a market cap of $193.5 billion and $124.02 billion, respectively, as of July 1. Microsoft (MSFT), however, crossed the $1 trillion mark in April and touched $1.04 trillion on July 1.
Symantec’s near-term sales and profits are projected to grow. Symantec stock currently trades at 13.05x its fiscal 2020 (ending March 2020) estimated EPS of $1.69 and 12.05x its fiscal 2021 (ending March 2021) estimated EPS of $1.83, which is based on the projected growth rates of ~6.6% and ~8.2% in those periods.
Symantec’s revenues are also expected to grow by 1.1% and 2.3%, in fiscal 2020 and fiscal 2021, respectively.
Analysts’ view on Symantec
Mizuho analyst Gregg Moskowitz believes that Symantec stock has an attractive valuation and has thus raised his rating from “neutral” to “buy” and the price target to $23 from $22 on the stock on June 17.
According to the analyst, the new management team after the resignation of CEO Greg Clark is expected to focus on its margins, particularly within the Enterprise Security segment, which is currently declining amid higher spending in the Enterprise Security business to support the cloud business. Also, the Mizuho analyst has predicted further cuts in the employee count in the near term in addition to the 8% headcount reduction announced in August 2018. The emphasis on improving margins and employee reduction would boost the company’s earnings, which declined 11.4% YoY in the fourth quarter of fiscal 2019.
On the other hand, Morgan Stanley analyst Keith Weiss downgraded the stock from “equal weight” to “underweight” and lowered the price target to $14 from $23 on June 11, according to a CNBC report. Weiss expects increased competition and management changes to pose a threat to the software security company’s revenue and earnings guidance.