Symantec shares dip after analyst downgrades, predicting company will lose contract to rival
By APFriday, February 12, 2010
Symantec shares decline after analyst’s downgrade
SAN FRANCISCO — Shares of Symantec Corp. dipped Friday after a Jefferies & Co. analyst downgraded the stock, predicting the security software maker will be losing a key consumer contract with computer maker Hewlett-Packard Co. to rival McAfee Inc.
Symantec shares fell 40 cents, or 2.3 percent, to finish trading at $16.83.
In a note to investors, analyst Katherine Egbert lowered her rating for Symantec to “hold” from “buy” and cut her price target by $2 to $18.
Egbert said she believes McAfee will snag a five-year contract to load its antivirus products on HP’s consumer computers — a deal now up for renewal that she thinks is worth about $200 million per year to Symantec.
The analyst said she thinks a new contract would start next January.
“Because McAfee has a lower operating margin for its consumer division than Symantec does, they can offer more attractive terms to HP,” she said.
Symantec spokeswoman Nicole Kenyon said that, as expected, its contract with HP is up for renegotiation and the company looks forward to continuing to offer its software on HP computers.
