Canadian handset maker Research In Motion Limited (USA)(NASDAQ:RIMM) has been having a decent rally in the markets recently with its stock having appreciated by nearly 50 percent in the last couple of weeks on several upgrades.
The most recent upgrade has come from Goldman Sachs which upgraded the stock to Buy on Thursday. It also raised the target price to $16 from $9 in the next 12 months.
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But can the stock sustain the rally for the long term?
Goldman Sachs had given investors a 30 percent chance that RIM's new operating system Blackberry 10 will be a success. There's no doubt that the new operating platform has received an enthusiastic response from network carriers, but we will have to wait till December to actually find out how it fares. Especially, how it stacks up against the formidable competition from Goggle, Apple and Microsoft.
Morgan Stanley, it must be remembered, has urged investors to sell the stock and termed it as `uninvestible'.
The difference between the approaches of the two companies is that while Goldman Sachs has taken a call on its new operating system, Morgan Stanley is taking a call on the company as a whole.
Analysts are prone to attribute the rally in the stock to an absence of negative news, rather than anything actually positive about the company.
RIM has its sights set on the third slot in the marketplace - after Apple and Google. But then there are many other contenders to that spot, notably Microsoft.
Shares of the company have recovered 90% from its all time low of $6.22 in September. In fact, the stock was up 35% in the past week.