Motorola Earnings: LMR Business Surprises on Growth and Margin Expansion; Valuation Increased

We are increasing our fair value estimate for wide-moat-rated Motorola to $320 per share from $312 as the company reported excellent first-quarter earnings. Shares are slightly overvalued in our view. Given strong results and the updated outlook, we are slightly increasing our growth and margin expectations. We will keep an eye on margin development within land mobile radio as margin strength here surprised us, with management citing a shift toward feature-rich LMR products and improving scale and supply dynamics. We have slightly increased our longer-term gross margin estimate for this segment.