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Investing.com - UBS initiated coverage on Motorola Solutions Inc. (NYSE:MSI) with a Buy rating and a $490.00 price target on Wednesday. The communications equipment giant, currently valued at $68.22 billion, is trading near its 52-week low, with InvestingPro data showing strong financial health metrics.
The investment firm cited expectations for Motorola Solutions to re-rate from 27x to 29x as growth accelerates into 2026, following what UBS projects will be a backlog-driven slowdown in 2025. The company currently trades at a P/E ratio of 33.5x and maintains a steady 1.07% dividend yield, with 14 consecutive years of dividend increases.
UBS anticipates a re-acceleration in Motorola’s core Land Mobile Radio (LMR) business in fiscal 2026, projecting an 80 basis point improvement following an expected 400 basis point slowdown in fiscal 2025.
The firm also expects Motorola’s Video business to see growth acceleration of 100 basis points to 12% in fiscal 2026, driven by the new SVX body camera that incorporates the company’s voice technology.
UBS highlighted the pending Silvus acquisition as expanding Motorola’s total addressable market in the Defense Tech space, noting it increases drone exposure through a relationship with Anduril and could add 2-3% upside to fiscal 2026 growth estimates after the deal closes.
In other recent news, Motorola Solutions has announced plans to acquire Silvus Technologies for approximately $4.4 billion, with potential earnouts bringing the total to around $5 billion. This acquisition aims to bolster Motorola’s position in mission-critical communications by integrating Silvus’s MANET technology, which supports secure, high-bandwidth data, video, and voice communications without fixed infrastructure. The deal is expected to close in the second half of 2025, pending regulatory approvals. Analysts from Evercore ISI and JPMorgan have maintained positive ratings on Motorola Solutions, with price targets of $500 and $515, respectively, highlighting the strategic value of the acquisition.
Fitch Ratings has reaffirmed Motorola’s ’BBB’ Long-Term Issuer Default Rating and ’F2’ Short-Term IDR, maintaining a stable outlook. The acquisition is anticipated to be accretive, with Silvus projected to generate approximately $475 million in revenue by 2025. Motorola’s consistent revenue growth and strong free cash flow generation are expected to support the financing of the acquisition through a mix of debt and cash. The company plans to leverage Silvus’s high-growth product line to enhance its offerings in the defense and unmanned sectors. Motorola’s credit profile remains robust, with expected pro forma annual free cash flow of approximately $1.5 billion to $1.6 billion, allowing for debt repayment and shareholder distributions.
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