Motorola: Goldman Upgrades To “Conviction Buy”

Motorola (MOT) shares are trading higher this morning after Goldman Sachs analyst Simona Jankowski raised its rating on the company to Conviction Buy from Neutral. Jankowski set a $7 price target on the stock, up from $4.50, but said there could be over 50% upside to her new target. Jankowski estimates that the company’s current stock price implies a negative $5 billion valuation for the handset business, “which is overly negative as even shutting down the business would only cost $1 billion.” She contends that with aggressive cost cutting, the handset business will approach break-even in 2010. She is bullish on the stock despite anticipation of “very weak” Q1 guidance when the company reports Q4 results on February 3. MOT today is up 10 cents, or 2.2%, to $4.64. (link)