Motorola is down more than 4% so far today after the chairman of Foxconn, one of its mobile phone contract manufacturers, gave weak colour on handset profits at the firm’s shareholder meeting. Foxcomm Chairman Samuel Chin said that Motorola continues to “have difficulties.”
Despite MOT’s cheaper valuation, AmTech analyst Mark Mckechnie is still wary:
We are not inclined to support MOT’s stock here despite valuation. Recall that during our downgrade on NOK we suggested MOT’s handset division may carry a negative value given competitive threats from the high-end and also little progress on hiring a new head for handsets. Our $8 “non handset” valuation model assumes ~ $0.55-$0.60 of EPS power for MOT’s 3 non handset divisions. We’d expect some value support at or below current levels.
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