Research In Motion Limited (USA)(NASDAQ:RIMM) shares are correcting in the opening session after the recent solid rally as this morning analyst at Canaccord Genuity downgraded the stock from Hold to Sell and set a price target of $10, about 16% lower from the Friday’s closing price, citing the recent rally doesn’t justify the company’s fundamentals.
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The analyst noted that "Over the past month, RIM shares have markedly increased ahead of the January 30 launch of long-awaited high-tier BlackBerry 10 smartphones. While initial sales of higher-ASP BlackBerry 10 smartphones should improve RIM's January and May quarter device sales and ASP mix, our checks and analysis of the global competitive landscape suggest a very low probability BlackBerry 10 sales can turn around RIM's long-term business trends",
The stock has gained about 35% in the past couple of weeks after multiple brokerages decided to upgrade the stock and provided optimistic note on the company’s upcoming BlackBerry 10 smartphones.
Firstly, it was Kris Thompson, analyst for National Bank, who decided to lifted the price target on the stock by 25% to $15. The firm has an Outperform rating on the stock.
Last week, the stock got one upgrade from Goldman Sachs, while analyst at Morgan Stanley, it must be remembered, has urged investors to sell the stock and termed it as `uninvestible'.
So far, it seems quite confusing where the stock could is heading, but one thing is sure that RIM need to perform a lot in order to boost its shareholders’ confidence.
So we are just couple of months away from the company’s much awaited new launch, which has high hopes from the Wall Street. Till then, volatility is expected to be on the higher side.
Shares of RIMM are down 2% in the opening session.