Shares of cybersecurity company McAfee Corp. (MCFE) soared 20% on Friday to close at $25.46 after the Wall Street Journal reported that the company was in final talks for its sale to Massachusetts-based private equity firm Advent International for over $10 billion.
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Citing people familiar with the matter, the report said the deal was likely to be announced on November 8.
California-based McAfee offers integrated security, privacy and trust solutions to protect consumers, enterprises and governments from cyberattacks. (See Insiders’ Hot Stocks on TipRanks)
If the deal goes through, it will come at a time when there is a rise in cyberattacks due to a shift in remote working culture as a result of the COVID-19 pandemic. This has led to an increase in demand for antivirus and digital security software.
Wall Street’s Take
Last month, Mizuho Securities analyst Gregg Moskowitz reiterated a Buy rating on the stock but reduced the price target to $27 from $32 (6.1% upside potential).
In a research note to investors, the analyst said, “Notwithstanding rising yields and greater inflation concerns that have intermittently weighed on software stocks, channel checks have continued to be quite favorable, and growth names have largely remained en vogue.”
Analyst Recommendation
Overall, the stock has a Moderate Buy consensus rating based on 3 Buys and 5 Holds. The average McAfee price target of $28.38 implies nearly 11.5% upside potential. Shares have gained almost 55% over the past year.
Risk Analysis
According to the new TipRanks’ Risk Factors tool, McAfee is at risk mainly from one factor: Finance & Corporate, which accounts for 43% of the total 65 risks identified for the stock. Under the Finance & Corporate risk category, the company has 28 risks, details of which can be found on the TipRanks website.
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