Feature Article

November 20, 2012

Research in Motion Scores a Financial Analyst Win, Sort Of

Jefferies & Co. financial analyst Peter Misek briefly pushed Research In Motion’s (RIM) share price into double digits today when he raised his rating on the stock ahead of RIM's upcoming launch of its new BlackBerry 10 devices on January 30, 2013. Misek’s upgrade drove the stock up more than three percent to $10.04 early in the day. It is the first time in five months that the stock has seen double digits. For those - us included - who opted to not buy RIM at its lowest point we might want to kick ourselves as it would have been a nice little pop. For those who are still hugely under water it won’t make any difference.

Apparently, Misek based his new and more positive view on what has been a favorable reaction by telecom carriers in the pre-release test loop 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. Misek also doubled his price target on shares of RIM to $10 from $5, and raised his overall rating on the stock to "hold" from "underperform." Misek goes on to note that, "With greater carrier shelf space and marketing support, we now believe BB10 has a 20 percent to 30 percent probability of success."

Image via Shutterstock

Quite honestly, these are not exactly statements of “ringing” endorsement, but they no doubt gave RIM CEO Thorsten Heins a bit more bounce in his step. We’re fans of Heins, so we’re glad he was able to enjoy the bounce. We’ve also given RIM a positive checkmark recently, deservedly so following its announcement that it will have at least 100,000 mobile apps in its app store on the launch day.

Fully in line with the rest of the financial analyst community, Misek has not had much to say of a positive sort on RIM for quite some time. Far more typical was Pacific Crest analyst James Faucette’s note issued yesterday that restates Faucette’s "underperform" rating on RIM's shares. He remains in the camp that believes there is virtually no hope that the upcoming launch will do anything to change RIM's likely existential outcome. RIM’s shares, as we write around 3:45 pm ET, are hovering at $9.71, down about 30 cents from its double digit high this morning.

Finally, Misek opted to state the obvious when he noted that there will be a negative impact on RIM if its launch fails (not much in terms of really going out on a limb there), but he also mentioned that he believes the stock could be worth as much as $43 per share within the next 12 months if RIM's bet pays off and its new operating system is licensed by other handset makers. That last line unfortunately includes the notion that RIM will be able to license the new operating system platform. Alas, that won’t happen. We ourselves continue to believe that Samsung will acquire RIM in the final outcome.

Edited by Brooke Neuman

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