MOT Stepping Towards Q1, 2011 Spin-Out

Analysts at Citigroup reiterate their "buy" rating on Motorola Inc MOT. The target price for MOT is set to $10. MOT posted better-than-expected Q1 results and provided higher-than-anticipated guidance. MOT’s handset business also showed good results for that period. According to Citigroup, Motorola’s shares should be “attractive to deep value and special situation investors (spin out planned for 1Q 2011).” According to Citigroup, the key points from MOT’s meeting were “1) Near term for Q2 Enterprise Mobility Solutions (EMS) is on track for sales growth & margin improvement both Q/Q & Y/Y. ..2) Long-term EMS sales growth expected in the 5-8% range. 3) EMS represents 34% of total Motorola sales & of this amount approximately 70-75% is public safety & 25-30% is rugged products (Symbol business). 4) This part of the business (EMS + Networks) is expected to be investment grade at the time of the spin. 5) EMS market share is #1 in pubic safety, commercial two way radios, enterprise mobile computing, bar & code scanning & is very sticky & entrenched with customers & not easily displaced…6) Post spin the EMS and Networks will be one trading stock but will be managed independently & to us there does not appear to be substantial synergies between the two companies.” More Analyst Ratings here