Symantec (SYMC) CEO Announcement Largely Expected; Board Also Evaluating Options - Nomura

Nomura comments on Symantec (Nasdaq: SYMC) following news that Mike Brown will become permanent CEO of the company. The firm rates Symantec at Neutral with a target price of $25.

Analyst Frederick Grieb commented: In a press release published after the close of the market, Symantec announced that interim CEO, Mike Brown, is to be appointed as the company’s CEO effective immediately. In a recent article, Bloomberg News stated that the board had narrowed its list of candidates down to three, with interim CEO Mike Brown the leading contender for the role of full-time CEO. Symantec had also stated that the company would announce the appointment of a full-time CEO in late September, so we believe that this announcement was largely anticipated by investors.

On the call to discuss his new appointment, Mike Brown suggested that the board had not only been focused on finding a new CEO during this time period, but had also looked at a variety of strategic alternatives for the company. As we mentioned in our September 9th report, Symantec Revisited, we believe that the larger components of Symantec have been shopped and no potential buyers emerged, thus it is unlikely that this strategic avenue will be pursued in the near future.

We believe Symantec’s goal of greater than 30% operating margins is achievable, potentially giving some longer-term upside to estimates, but we rate the stock Neutral with a $25 target price, given that the company’s low absolute valuation is balanced by our negative partner and customer checks on the core business, which continue to point to fundamental weakness, as well as a valuation that is towards the higher end of its recent trading history.

For an analyst ratings summary and ratings history on Symantec click here. For more ratings news on Symantec click here.

Symantec closed at $23.73 yesterday.

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