Is it possible that this is time that Symantec Corporation (NASDAQ: SYMC) is finally going to rocket higher? Symantec is now back to being security focused and the Blue Coat acquisition is going to make that even more of the case. The difference here is that it opens up more data security efforts for Symantec.
After an analyst upgraded Symantec on Tuesday (9/13), we wanted to take a look at other analyst calls of late. It turns out that the bias has been leaning higher.
Tuesday’s call was from Wunderlich, with the firm raising its rating to Buy from Hold. It also set a price target all the way up at $30.00 on Symantec — which is $1.00 higher than the prior street high target price.
Before getting into individual analyst calls made of late, the Thomson Reuters consensus price target should say it all. The current consensus analyst target (mean) is $24.31. That consensus price target was $23.28 a month ago, $20.77 two months ago, and it was all the way down at $19.47 just three months ago.
BTIG recently kept a Buy rating and $28.00 price target. The firm’s weekend software summary said:
We continue to believe that $2.00 EPS by Fiscal Year 2019 is achievable, and think that Symantec’s stock should continue to re-rate as investors get more comfortable with the extent and impact of the combined $550 million in cost savings.
BTIG expects linearity in Blue Coat integration costs, but they still expect more than 600 basis points of margin expansion from Fiscal Year 2016 to Fiscal Year 2018. That will come from targeting efficiencies in procurement, back office operations and real estate. BTIG even sees numerous scenarios boosting revenues for the new Symantec.
Barclays, back on September 7, said that a McAfee sale with Intel and TPG combined might create a more focused competitor (MacAfee and Norton dominate PC markets). They had a mere Equal Weight rating with a $24.00 price target. Barclays said:
We think spinning McAfee out as an independent company could create a more focused competitor to Symantec. Recall, Intel acquired McAfee in 2010 and part of the vision was to bring security down closer to the chip level. The market did not evolve towards that, and at the same time the broader endpoint market started to see more competition from freemium vendors. By spinning out, McAfee might be able to sharpen its focus in security, allowing it to attract more talent and potentially become a more focused security competitor to Symantec.
It was also just on September 6 that 24/7 Wall St. pointed out the chart being so strong that chart watchers and investors might be ignoring the underlying fundamental valuations based upon hopes ahead.
Even back in August, Citigroup raised Symantec’s rating to Buy from Neutral, and its price target was $26.50 (versus a prior close of $23.11 at that time). Also in August, Symantec was started with a Buy rating and was given a $26 price target (versus a prior $22.54 close) at Goldman Sachs.
One report that was not positive came from Standard & Poor’s on September 10. It kept a “Sell” rating and they have a mere price target of $20.00. Their ‘risk assessment’ said:
Our risk assessment for Symantec reflects uncertain demand for the company’s products, the highly competitive market in which it operates and execution risks. This is balanced by the company’s solid market position and the growing number of cyber security threats.
So far the analysts keep pointing higher on Symantec, at least for the most part. The shares have pulled back during the latest market sell-off, down almost 1% at $24.62 on Tuesday. Symantec’s 52-week trading range is $16.14 to $25.19.