Jefferies Upgrades Symantec Following Financial Analyst Day

In a report published Monday, analysts at Jeffries upgraded Symantec Corporation (NASDAQ: SYMC) from Underperform to Hold. The price target was also raised from $20 to $21. Apart from the absence of negative catalysts for the company until late July, the outlook for Veritas is also better than expected.

Any potential downside risk to the stock is likely to be mitigated by the upside from the sale of Veritas. The company's FY17 growth guidance is higher than the street consensus. "This bucks the trend of several years of share losses, and is backed by more credible product vision than we've heard in some time," the analysts said.

Symnatec's storage segment has now been cut down to a smaller and more stable business, which is bolstered by the strength in the purpose built appliances and data protection businesses. The company has also disclosed that Veritas' taxable basis is less than $1 billion.

"We increase our Veritas value from $4.7bn to $6.8bn in our SOTP, and see scenarios yielding upwards of $10bn in a sale financed with 40% debt," the analysts added.