The recent pullback in Motorola Solutions Inc (NYSE:MSI) stock and a market backdrop that makes defensible earnings growth seem attractive have created upside potential, according to Morgan Stanley.
The Motorola Solutions Analyst: Erik Lapinski upgraded the rating for Motorola Solutions from Equal-Weight to Overweight while keeping the price target unchanged at $240.
The Motorola Solutions Takeaways: The stock could rise beyond $300 over the next couple of years, Lapinski said in the upgrade note.
The analyst mentioned three factors that could contribute to Motorola Solutions returning around 20% over the next two years:
The LMR (land mobile radio) cycle may remain stronger for longer. “Given supply chain and COVID disruptions have impacted growth over the past 1-2years, we see potential for a higher growth rate for LMR through 2024 than we are currently forecasting,” Lapinski wrote.
Motorola Solutions managed to gain significant market share in video surveillance, including via inorganic means, the analyst said.
The company “does not sacrifice operating efficiency for growth,” he added.
“At this point, we think MSI's valuation has already re-rated to account for some of the top line growth acceleration thesis, but we see upside coming from our earnings estimates moving higher over the next year.”
MSI Price Action: Shares of Motorola Solutions were up 0.88% at $212.13 midday Monday, according to Benzinga Pro.
