Motorola Continues to Shine While Others Struggle, but Valuation Still Looks Challenging to Us

We raise our fair value estimate for Motorola Solutions to $216 per share, from $210, after the firm’s fourth-quarter results and guidance for 2023 both beat our expectations. We remain impressed with Motorola’s performance over the past two years in the face of numerous headwinds to both margins and the demand for its commercial business. Motorola is starting to reap the benefits of recent legislation committing more government funding toward public safety, and we see this as a long-term boon for the firm. Additionally, Motorola has increased its acquisition activity, and we see it savvily bolting on complementary businesses. Motorola’s wide and expanding solution set creates sticky customer relationships that create a sturdy narrow economic moat, in our view. Though we see the firm as healthy and strong, shares continue to look fundamentally out of reach to us.