Shares in Research In Motion Limited (USA)(NASDAQ:RIMM) got a boost and soared more than 35% in the past week. Analyst at National Bank raised its price estimate of its shares while maintaining its Outperform rating on the stock.
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National Bank Financial's Kris Thompson said that the launch of RIM's new operating platform Blackberry 10 should help its shipments, raise subscriber base and enhance its cash position.
He said that for fiscal 2014, the company would ship 35.5 million units compared to an earlier estimate of 31.6 million units which would give the company about 4.5 percent of the global share of smartphones.
The average selling prices per unit was revised upwards to $280 from $260 by the end of May 2013.
"Let’s reiterate our short-term investment thesis. Buy the stock ahead of the BB10 product launch when we expect shipment estimates to increase, especially from U.S. brokers where a break in negativity could lead to short covering and on-going stock momentum. The carrier certification process is the key risk to our short-term thesis and shipments estimates. Valuation still a moving target until sustainable business is proven; and we’re far from proven today. Applying a fundamental valuation to RIMM is tough; let’s be frank, F2014 EPS estimates are very uncertain. But if we’re even half-way correct with our $2.3 billion EBITDA forecast and management can stabilize the business on a recurring basis, then we’re off to the races with a current EV of just over $3 billion."