Enes Evren
NCR Corp. (NYSE:NCR) shares slipped on Monday as investment firm Morgan Stanley downgraded the software and technology company, noting that its decision to halt the sales process and split itself into two companies is concerning.
Analyst Erik Woodring lowered his rating to equal weight from overweight and cut the price target to $27 from $38, noting that it's unlikely that investors will "put aside" the risks of a split being value-enhancing and bid the stock higher.
"In the near-term, we expect shares to be range-bound until we get greater clarity on the key details of the spin transaction," Woodring wrote in a note to clients.
The analyst added that over the long-term there could be value unlocked as NCR (NCR) splits itself into two companies, one focused on digital commerce and the other on ATMs. However, the spin date is roughly 15 months away and risks are "elevated," indicating that investors will need to "have patience."
NCR (NCR) shares fell more than 2% to $22.72 in premarket trading, following Friday's 20% decline.
Atlanta, Georgia-based NCR (NCR) had initiated a strategic review of the company in February.
Analysts are largely positive on NCR Corp. (NCR). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a STRONG BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates NCR a HOLD.