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Morgan Stanley downgraded Zebra Technologies (NASDAQ:ZBRA) to Under-weight from Equal-weight given its view for earnings power to not to return to COVID levels.
The analysts believe that valuation today is overly stretched given lower earnings power expectation and the stock should start to trade closer to eight year average in the mid-teens range over the next one year.
The firm also cut its price target on Zebra to $220 from $260 as it reduces its P/E multiple to 16x (from 20x) while maintaining its earnings power estimate of $13-15 (more likely a 25 earnings number).
Zebra has a Hold rating at Seeking Alpha’s Quant Rating system, which consistently beats the market. The Seeking Alpha authors’ rating (1 author) is also Hold. Meanwhile, the average Wall Street analysts’ rating is more positive with a Buy.
ZBRA -2.05% to $246.99 premarket Sept. 20