Morgan Stanley downgraded Motorola Inc. (MOT) to outperform from buy.
Analyst Alkesh Shah says the downgrade is based on valuation, and says shares have appreciated over 68% since April. Shah says the company provided encouraging results on its cost cutting efforts, but he doesn't believe market fundamentals or visibility into 2002 have improved. He calculates fair value at
$19, with a trough price of $6-$8, upside to his $23 target.
Shah notes GPRS infrastructure delays and the spreading economic slowdown could negatively impact sales forecasts. He's looking for improved execution and better visibility.