Motorola: Debating Prospects For A Turnaround

Yesterday’s news that Motorola (MOT) is cutting 4,000 jobs and that Q4 results will come in short of previous expectations has triggeed a flurry of research from the Street on just how bad things gotten over there. The basic questions are a) whether the cuts have gone far enough, and b) whether the company has a realistic chance to turnaorund its handset business. Given the suddenly warm-and-fuzzy feelings investors have for Palm (PALM) over their new OS and the Palm Pre , it would be a mistake to simply throw in the towel on MOT. But they certainly are in big trouble, with Q4 handset units down 25% sequentially from Q3 - not a good trend. Capturing the debate over the stock in a nutshell, MOT today was upgaded by J.P. Morgan - and downgraded by Barclays. Here’s a summary of what they said: J.P. Morgan’s Ehud Gelblum upped his rating on the stock to Overweight from Neutral, setting a price target of $7. He says the cost-cutting moves the company is making should ... (link)