UPDATE 1-RESEARCH ALERT-Goldman Sachs upgrades Motorola to buy

martes 20 de enero de 2009 14:42 CET

Jan 20 (Reuters) - Goldman Sachs upgraded Motorola Inc MOT.N to "conviction buy" from "neutral," saying significant cost cuts should narrow losses in Motorola's mobile devices division.

The brokerage said the current stock price implies a negative value of almost $5 billion to the company's mobile services division, which it called "overstated".

"Even if Motorola were to shut down its Mobile Devices division in a worst-case scenario, we estimate that would cost around $1.1 billion," analyst Simona Jankowski said in a note.

The brokerage, which expects handsets division to approach breakeven in 2010, said it would not be surprised to see more headcount reductions this year.

Goldman Sachs expects Motorola to provide a "very weak" first-quarter outlook in February, but said it expects the forecast will remove the overhang on the stock that has prevented the market from taking a longer-term view.

Goldman raised its price target on the stock to $7 from $4.50.

Motorola shares closed at $4.54 Friday on New York Stock Exchange. (Reporting by Jennifer Robin Raj in Bangalore; Editing by Anil D'Silva)