FBN Securities Starts Symantec (SYMC) at Outperform
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FBN Securities initiated coverage on Symantec (NASDAQ: SYMC) with an Outperform rating and a price target of $29. Analyst Shebly Seyrafi sees benefits from its Blue Coat acquisition.
"The company had traditionally been focused on the consumer security market where its leading anti-virus (AV) solutions (Norton) have, along with those from Intel’s McAfee segment, MSFT (Microsoft Essentials), Trend Micro, and AVG, been the key AV solutions in the market. The consumer security market is mature (we project this market to decline at around 2% per year) but is a very high margin (56% operating margin last quarter) segment which SYMC can use to make investments in the faster-growing but (currently) low-margin enterprise security market (6% operating margin last quarter). Note that if, as we believe, SYMC produces a free cash flow (FCF) of over $1B in F2018, then its FCF yield at the current share price is over 6.5%, which is quite attractive," said Seyrafi.
The analyst added, "We believe that through the combination of cost reduction actions, increased scale, and integration of Blue Coat Systems, SYMC can increase its enterprise security operating margin from 6% last quarter to 26% by the end of F2018."
Shares of Symantec closed at $24.94 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, New Coverage
Related EntitiesMcAfee Intel Merger, Definitive Agreement, Shebly Seyrafi
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