Expectations among industry financial analysts that Motorola Inc.’s fourth quarter earnings will exceed consensus estimates of 81 cents per share caused the company’s stock to skyrocket Friday to $150 a share.
Motorola is expected to release fourth quarter earnings today.
Lehman Brothers analyst Tim Luke raised his price target for Motorola to $200 a share, from $160 a share. He said he expects Motorola to continue posting positive quarterly reports throughout the year and said the company was named to the Lehman Brothers 1999 Ten Uncommon Values List after the close of the General Instrument Corp. merger.
He added he believes Motorola’s expansion into the broadband access space has it well-positioned to benefit from growing demand in wireless markets. In particular, he said Motorola has improved revenue and margin trends in its wireless handset and semiconductor businesses, and is regaining momentum in wireless infrastructure markets.
Lehman Brothers is not alone. PaineWebber upped its price target as well, to $196 from $146, and increased its 2001 earnings per share estimate to $4.35, from $4.18. The firm maintained its 1999 earnings per share estimate of $2.07 and its 2000 EPS estimate of $3.27. Fourth quarter per-share earnings expectations were raised 1 cent to 82 cents, but whisper earnings rumors have it as high as 91 cents a share.
Both Lehman Brothers and PaineWebber have Buy ratings on Motorola stock. Additionally, Merrill Lynch upgraded its recommendation from Accumulate to Buy, with no further explanation.
The reports lit a fire under Motorola’s stock, which rose from $138.56 a share to as high as $154.12, up $15.56. The stock closed Friday at $150, up $11.43 a share on volumes of 6.23 million.
