Gen Digital's (GEN) potential acquisition of GoDaddy (GDDY) is less likely, with increased share buyback a more likely outcome for capital allocation at current trading levels, RBC Capital Markets said in a note Monday.
Fundamentally, the brokerage said it finds the company's improved execution and structural step-up in growth encouraging.
RBC maintained its fiscal Q2 earnings per share guidance of $0.72, but now expects revenue of $1.35 billion, compared with $1.34 billion earlier, after Chief Executive Vincent Pilette said fiscal Q2 and full-year results were tracking toward the high end of guidance.
For full-year fiscal 2027, the brokerage said it now expects EPS of $2.93 on revenue of $5.45 billion, compared with prior outlook of $2.92 and $5.43 billion, respectively.
RBC Capital Markets maintained its sector perform rating on the stock, with a price target of $26 per share.
Gen Digital shares were down 1.4% in Tuesday trading.
Price: 20.57, Change: -0.29, Percent Change: -1.37