Desjardins Gives Price Target of $105 for RIMM


Desjardins Securities has initiated coverage of Research in Motion Ltd. with a “buy-above-average risk” rating and a 12-month price target of $105 (U.S.) and $121 (Canadian) a share. RIM closed Tuesday at $77.10 (U.S.) on the Nasdaq Stock Exchange and at $87.93 (Canadian) on the Toronto Stock Exchange. Analyst Paul Howbold outlined in his report a number of reasons why he believes RIM’s rapid growth will continue. For one thing, “the mobile corporate e-mail market remains largely unpenetrated,” with penetration rates in the low single digits, he said. He expects that to rise sharply.

Also, “RIM remains the leading supplier to the enterprise market thanks to its integrated offering,” Mr. Howbold said. Furthermore, “we believe that the replacement cycle, and its ongoing stream of hardware revenues, remains one of RIM’s key revenue opportunities,” he said.

“In particular, the strong initial success of models such as the 8700 suggests that the replacement cycle could be reduced further from the current 2½years,” Mr. Howbold said. And that shorter replacement cycle, together with a larger customer base, means accelerating device sales.