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Bernstein Sees Blackberry's Business Model Under 'Severe Pressure' on Lackluster BB10 Results

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Blackberry (NASDAQ: BBRY) shares tumbled nearly 30 percent Friday after the company reported shipments of its BB10 phone missed Q1 estimates and forecast an operating loss for Q2.

The stock is continuing lower this week (down 2+ percent Monday afternoon) as the company received a round of downgrades following the news. Bernstein's Pierre Farragu joined the crowd, cutting Blackberry to Underperform and slashing his price target from $10 to $7.

The analyst said the $7 price target is a floor value based on the company's net assets, not a "fair value" of the stock.

Farragu said the BB10 was gaining "very limited traction with users" and expects the Blackberry business model to come under "severe pressure" on declining shipments, eroding revenue and pricing tension.

Farragu maintains an Underperform rating on shares of BlackBerry.

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