Argus Cuts Symantec To Hold

• Symantec Corporation SYMC have declined 23.17 percent year to date, with the share price almost touching the 52 week low on November 27.
• Argus’ Joseph Bonner has downgraded the rating on the company from Buy to Hold.
• Although the stock has been meaningfully lagging the market in 2015, Bonner does not believe that the valuation is cheap on a forward basis.

Analyst Joseph Bonner noted, “Symantec has been in turnaround mode for some time, and will likely need to work through transition issues over the next year or more.”

Bonner also mentioned that management’s decision to sell Veritas was better than the original plan of spinning out the business and holding an IPO. However, concerns still remain regarding execution in Symantec’s core Enterprise and Consumer security segments.

According to the Argus report, “As Symantec has been mired in management, execution, and divestiture issues, competitors have moved ahead with innovative integrated network security offerings.”

However, Bonner did note that the company had robust assets and could get a cash infusion of $6 billion from the sale of Veritas.

The EPS estimates for FY16 and FY17 have been lowered from $1.84 to $1.34 and from $1.97 to $1.06, respectively.