Wednesday, November 21, 2012

Is Wall Street getting carried away by Research In Motion (NASDAQ:RIMM)?

Wall Street tends to get carried away sometimes. It’s happening in the case of Research In Motion Limited (USA)(NASDAQ:RIMM), the Canadian handset maker which manufactured the Blackberry range of devices.

Will RIMM continue To Move Higher? Find Out Here

While the market lost no time in kicking it, when they found Apple and Samsung, it is equally quick in embracing it and getting it back into the fold.

Its new operating system BB10 is expected to change the company's fortune, according to initial reports and investors are already betting on its future prospects on the strength of it.

Jefferies & Co.'s Peter Misek has set the ball rolling up upgrading the stock to Hold from Underperform and raising the target price of the stock to $10 from $5 - but that’s not all.

Misek expects the share price to rise to $43 in 12 months. He has estimated the stock has the potential to appreciate 400 percent, which seems remarkably optimistic by any standards.

Everything is riding on the company's BB10 and the fact that the new operating platform has received a lot of positive feedback from network carriers.

"Nonetheless, on his call for a $43 share price, Misek thinks that RIM’s licensing ability will also be a significant growth opportunity. On the other hand, he sees the stock languishing in the $5- $7 range if he is wrong.  On the report, shares of RIM were up almost 3% to $10.04," Forbes said.

However Misek's optimistic estimates do not seem to take into account that competition from Google and Amazon and the fact that these companies are desperate enough to sell their handsets at absurdly low costs.

For RIM to succeed at it is expected to, would require Samsung and Apple to either stumble or grow extraordinarily slow - which doesn’t seem like it is going to happen anytime soon.


  1. Did you even bother to read the Jefferies report? Misek clearly says there is a low probability (20-30%) that BB10 will be a success. In the case that it is, the stock could reach $43 in 12 months.

    I am long RIMM.

  2. Yep hes say that, but that is what you call marketing. If it hits $43 he will say I told you so, and if misses he we say I told you so.

    The $43 gets your written up, $10 does not. Marketing 101.

  3. Jefferies is a wet blanket - the BU Value on RIM is $10 - so why on postive prospects would you target $10 - the Co. and the new BB10 has tremendous upside potential very little downside.

    $43 in 12 months is a conservative success - I would expect by end of 2013 RIM stock will be closer to $80 per share - it is super cheap right now with hedgers taking profits but there is significant long term positions now being taken by prominent investors - Buy now or regret!

  4. Where was this article when all the analysts were so quick to write RIMM off and professionally concluded that a sale/merger would be the only viable option for the company to stay alive? I do agree with the title however, which is why the stock price is as low as it is today.


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