Tag: ubs securities

Analysts review RIM shares given iPhone and Nortel news



It has been a fairly intense month for BlackBerry. With the Back-to-School and holiday seasons fast approaching, RIM needs to churn out more devices and flood the market to meet the standard upswing in demand. That, coupled with Jim Balsillie’s moves to purchase the Phoenix Coyotes and RIM’s attempt at acquiring Nortel stock, there is no shortage of BlackBerry news. Given this amount of news, you can always expect an analyst to chime in with their views regarding where the stock is headed.

Phillip Huang, UBS analyst, has downgraded RIM to Neutral from Buy and cut his price target to US$88 from US$90 given the company’s price valuation. The analyst is also talking about concern regarding a new partnership between Verizon and Apple to distribute the iPhone.

“We’ve noted our expectation for Verizon Wireless to potentially announce a data-only Apple device this year,” he said in a note Monday. “Although we don’t expect a Verizon iPhone launch this/next year, we believe it could prove to be a sentiment headwind.” It is also possible the iPhone could launch on another operator in 2010, he said.

Peter Misek of Conaccord Adams, is taking a different view. He has maintained his Buy rating and US$95 target price for RIM. The potential government involvement and turnaround in the Nortel deal, has been cited as his reason for maintaining the Buy rating.

Personally, I don’t feel iPhone competition is a valid reason for downgrading stock. If you look at the numbers, BlackBerry dominates hardware sales because they cover a spectrum of users, while the iPhone only appeals to one form factor demographic and lifestyle user. With regards to the Nortel deal, I would be surprised if there is any turnaround. The government would have to declare that the sale of Nortel assets are a matter of national security, which is a tough case to make. So while there has been a lot of news this past month, the RIM ship is sailing steadily.



Analysts maintain buy given upcoming BlackBerry devices



While many bloggers have lamented the fact that RIM keeps releasing devices, it seems to be keeping shareholders happy.

The constant release of devices frustrates the BlackBerry community in that the devices have been mostly hybrids of preexisting devices, without making any significant leaps in the technology or offerings.

Last year, RIM released four devices in the seven months that precede the fall/Christmas consumer blitz. Before Christmas 2009, we will see the launch of the Tour 9630, Curve 8520, Onyx (fall?) and Storm 2 (November 2009?).

At RIM’s last conference call, there was concern over the fact that enterprise subscribers had declined compared to previous quarters. In light of this, analysts such as UBS Securities’ Phillip Huang and Maynard Um say they are “still anticipating eventual enterprise acceleration.” They added, “We maintain our view that enterprise acceleration is likely to occur given its captive base, limited competition, depletion of Blackberries in “IT closets,” and limited IT budgets for switching costs.” That being said, the firm is maintaining a “buy” rating on RIM’s stock with a long-term target of $90.