NortonLifeLock Gets BofA Upgrade, Expectation of Consumer Security Renaissance

NortonLifeLock Inc NLOK has exhibited better-than-expected growth, driven by solid execution of management’s strategy, according to BofA Securities.

The NortonLifeLock Analyst: Tal Liani upgraded the rating for NortonLifeLock from Underperform to Buy, while raising the price target from $19 to $30.

The NortonLifeLock Thesis: Consumer security seems poised for a “growth renaissance” in the next few years, given that there are more than 50 billion connected devices globally and a low penetration rate, Liani said in the upgrade note.

He expects the penetration rate to rise over the years, with increased awareness of the need for consumer security solutions.

NortonLifeLock’s target for fiscal 2022 reflects an acceleration in revenue growth to 8% to 10% and adjusted earnings of $1.70 per share, the analyst noted. He added, “The EPS growth is even more impressive at 60% YoY, driven by an increase in operating margin from 35% in 2020 to 50% in 2021.”

“Management believes the consumer cybersecurity market is heavily underpenetrated, which leaves room for growing the subscriber base as well,” Liani wrote.

“Lastly, international expansion is another key element, with international sales accounting for 30% of revenues, and Management outlined a country-by-country strategy to address the remaining potential,” he further stated.

NLOK Price Action: Shares of NortonLifeLock had risen by 6.94% to $24.97 at the time of publication Wednesday.

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