Motorola shares could rise 40 percent: Barron's

Signage for Motorola is displayed outside their office building in Tempe, Arizona October 29, 2009.

PHILADELPHIA (Reuters) - Shares of communications equipment company Motorola Inc MOT.N could rise 40 percent if it spins off its profitable cellphone division even as the company faces many challenges, according to Barron's.

Motorola's stock looks attractive on a sum-of-the-parts basis, with its most valuable unit selling communications gear to police and fire departments, Barron's said.

The company appears to be worth at least $9 a share, the newspaper said.

Motorola seems primed for a breakup because it has co-CEOs, with Sanjay Jha, formerly of Qualcomm Inc (QCOM.O), heading the mobile-devices segment, and Greg Brown overseeing the rest of the company, Barron's said.

The company also has $4.6 billion, or $2 a share, of net cash and investments, Barron's said.

The company also has an division called Enterprise Mobility, which sells radio, data-communications and other equipment to police and fire departments and other government operations. That unit could be worth $10 billion, or more than $4 a share, Barron's said.

The home-and-networks division had operating profits of $558 million last year and could be worth $4 billion, or almost $2 a share, Barron's said.

All this totals about $8 a share without the mobile-phone division, which is reviving under Jha's leadership, the newspaper said. Motorola shares could rise 40 percent if it could spin off the cellphone division, Barron's said.

(Reporting by Jessica Hall; Editing by Bernard Orr)