Join        Login             Stock Quote

Research In Motion (RIMM) Raised To 'Sector Outperformer - Speculative' By CIBC

 November 26, 2012 10:03 AM

(By Balachander) Research In Motion Ltd. (NASDAQ: RIMM) (TSE:RIM) shares were upgraded to "Sector Outperformer - Speculative" from "Sector Underperformer" by CIBC World Markets Inc.

The brokerage also more than doubled its price target on the stock to US$17.00 from US$8.00.

"Our rating change is based on RIM's existing subscribers wanting to upgrade to BB10. RIM's 80MM subscribers including enterprise (20MM) and the largely no-contract Int'l consumer base should both upgrade," the brokerage wrote in a note.

The brokerage estimates 41.4MM shipments in F2014 vs. 30.2MM in F2013 and 49MM in F2012.

CIBC said RIM should continue to move higher as sentiment, BB10 marketing and lack of new competing devices play out.

[Related -Google (GOOG) Gives A Lesson On The Importance Of Viewing Multiple Timeframes]

With a January 30 BB10 launch date locked in, along with carrier and developer feedback now more clear, an upgrade of the existing subscriber base will be the most likely outcome. Even in the face of lower services ARPU (we assume -6% in F2014), RIM looks materially undervalued.

At the same time, RIM has stated it expects to see declines in services revenue due to pricing pressure. CIBC sees a 10 percent decrease in services ARPU y/y, coupled with 20 percent GM on devices in F2014, leading to EPS of $0.85.

The stock, which has been trading in the 52-week range of $6.22 to $18.77, added 1.33 percent to trade at $11.81 on the NASDAQ on Monday.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageIntel Corporation (INTC): Analysts believe PC Replacement Cycle Will Stretch Valuation Metrics

Intel Corporation (NASDAQ:INTC) rocked on Humpday thanks to better than expected earnings, forward guidance read on...

article imageSanDisk Corporation (SNDK) Q2 Earnings Preview: Beat and Pop

SanDisk Corporation (NASDAQ:SNDK) will host a conference call Wednesday, Jul. 16, 2014 at 2 p.m., Pacific, read on...

article imageAtwood Oceanics, Inc. (ATW) and ENSCO PLC (ESV): Kick the Tire Time Say BMO

It is time to think about buying offshore drillers so says BMO Capital Markets analysts Alan Laws and read on...

article imageeBay Inc. (EBAY) Q2 Earnings Preview: Cyberattacking Earnings?

eBay Inc. (NASDAQ:EBAY) will release its financial results for the second quarter of 2014 after the market read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.