BlackBerry maker wins vote of confidence ahead of BB10

TORONTO Tue Nov 20, 2012 9:34pm IST

Research in Motion (RIM) BlackBerry smartphone handsets are pictured in this illustration picture taken in Lavigny, July 21, 2012. REUTERS/Valentin Flauraud/Files

Research in Motion (RIM) BlackBerry smartphone handsets are pictured in this illustration picture taken in Lavigny, July 21, 2012.

Credit: Reuters/Valentin Flauraud/Files

Related Topics

Stocks

   

TORONTO (Reuters) - Research In Motion Ltd, for months enveloped by a wave of negative sentiment, got a boost on Tuesday when one of its most influential critics raised his rating on the stock ahead of the launch of RIM's make-or-break new line of BlackBerry 10 devices.

The upgrade by Jefferies & Co analyst Peter Misek pushed RIM's share price into double digits for the first time in five months, with the stock up more than 3 percent at $10.04 in early trading on the Nasdaq.

Misek based his more optimistic view of the BB10 launch, set for January 30, on a favorable reaction by telecom carriers to the devices and the new operating system that powers them.

"Preliminary results from our quarterly handset survey indicate developed market carriers have a much more positive view of BB10 than we expected," Misek said in a note to clients.

Shares of Waterloo, Ontario-based RIM RIM.TO RIMM.O, a one-time leader in the smartphone industry, have plummeted in recent years as its aging line-up of devices lost ground to faster and snazzier devices from rivals. The company has bet its future on the new BB10.

RIM hopes BB10 smartphones will help claw back market share it has lost in recent years to Apple Inc's (AAPL.O) iPhone and devices that run on Google Inc's (GOOG.O) Android operating system.

Misek, who doubled his price target on shares of RIM to $10 from $5, also raised his rating on the stock to "hold" from "underperform".

"With greater carrier shelf space and marketing support, we now believe BB10 has a 20 percent to 30 percent probability of success," said Misek, who has long been skeptical of RIM's odds of engineering a turnaround.

Misek cautioned that there is still downside if RIM's gamble on BB10 fails, but he noted that the stock could be worth as much as $43 within the next 12 months if RIM's bet pays off and its new operating system gets licensed by other handset makers.

RIM says its new devices will be faster and smoother and have a large catalog of applications, which are now critical to the success of any new line of smartphones. While feedback from both developers and carriers on the new devices has been largely upbeat, financial analysts have been much more circumspect about the company's prospects.

Misek's view is not shared by at least one of his counterparts.

In a note to clients on Monday, Pacific Crest analyst James Faucette reiterated his "underperform" rating on RIM's shares. He said regardless of its quality, there is almost no chance that BB10 will meaningfully change RIM's trajectory.

RIM shares were up 3.7 percent at $9.95 at midmorning on the Nasdaq, while its Toronto-listed shares rose 3.1 percent to C$9.89.

(Reporting by Euan Rocha; Editing by Jeffrey Benkoe; and Peter Galloway)

FILED UNDER:

"India's Daughter"

Reuters Showcase

Countering China

Countering China

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

'India's Daughter'

'India's Daughter'

Society created Delhi gang rape convicts: Filmmaker Leslee Udwin.  Full Article | Related Story 

Kohli Censured

Kohli Censured

BCCI warns Virat Kohli against repeat of misbehaviour.  Full Article 

MUDRA Bank

MUDRA Bank

Funding the unfunded: India helps small business borrow to grow  Full Article 

PML(N)'s Hope

PML(N)'s Hope

Pakistan's ruling party looks for gains in upper house election  Full Article 

For Women's Right

For Women's Right

Afghan men don burqas, take to the streets for women's rights.  Full Article 

U.S. Envoy Attacked

U.S. Envoy Attacked

Knife-wielding attacker slashes face of U.S. ambassador in South Korea  Full Article 

New Strategy

New Strategy

Ashwin mulls 'one-sided' ploy against big-hitters.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage