UPDATE: Canaccord Genuity Downgrades Research In Motion to Sell, Raises PT
In a report published Monday, Canaccord Genuity downgraded its rating on Research In Motion Limited (NASDAQ: RIMM) from Hold to Sell, but raised its price target from $8.00 to $10.00.
Canaccord Genuity noted, “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. Our checks indicate high-ARPU consumers continue to switch from BlackBerry to sticky iPhone and Android ecosystems in droves, BYOD (bring your own device) trends continue to lower RIM's higher-ARPU enterprise base, and sub-$200 3G Android smartphones in emerging markets threaten RIM's global sales and subscriber base. While we believe BB10 is a dramatically improved user experience versus BB7 and RIM's new hardware is more competitive with higher-end smartphones, our checks do not indicate the consumer pull, carrier push, or developer excitement necessary for BlackBerry 10 to reverse the challenging trends faced by RIM in order to return the company to sustained profitability. As a result, we downgrade to SELL based on our $10 sum-of-parts analysis.”
Research In Motion Limited closed on Friday at $11.60.
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