Morgan Stanley Reiterates Overweight Rating, $22 PT on BlackBerry on Strong FQ4 Report

In a report published Monday, Morgan Stanley analyst Ehud Gelblum reiterated an Overweight rating and $22.00 price target on BlackBerry

. In the report, Gelblum noted, “BBRY reported a strong FQ4 with adjusted gross margin surging to 40% the main story, 700 bps higher than our above-Street 33%, and up 840 bps q/q. Service revenue, ASP and cash balances were also above our estimates, while total revenue on lower BB6/7 unit shipments, and the subscriber count were lower. Revenue of $2,678M was $292M shy of our $2,970M estimate, down 2% q/q and 36% y/y as total smartphone units of 6M missed our estimate by 1.5M, even as BB10 shipments of 1M were spot-on our estimate. Blended ASP of $256 increased $29 q/q, $8 above our $248 est, likely on the mix-shift to BB10. Assuming a $450 ASP on BB10 devices (and a $200 tablet ASP) implies BB6/7 ASP fell 3% q/q to $222 from $228, accelerating from flat ASP in FQ3.” BlackBerry closed on Thursday at $14.45.