FBR Capital Markets Reiterates Underperform on BlackBerry Ahead of Expiration of Fairfax Agreement
In a report published Wednesday, FBR Capital Markets analyst Scott Thompson reiterated an Underperform rating and $8.00 price target on BlackBerry Ltd. (NASDAQ: BBRY).
In the report, FBR Capital Markets noted, “We expect shares of Blackberry to remain range-bound through the expiration of the tentative agreement with Fairfax. The company has recently published its F2Q14 6-K, offering positive updates that suggest the company may be on the right path to significantly reduce a portion of its on- and off-balance-sheet commitments. Supplier commitments have come down significantly over the three-month period, and a combination of reorganization efforts as well as an aggressive decline in its handset manufacturing capacities may leave BlackBerry closer to a cash flow neutral position (after restructuring) than many expect. As Fairfax's November 4 deadline for a $9/share acquisition approaches and news of other potential buyers surfaces, we expect BBRY stock could prove resilient near the $8 level. However, we remain skeptical on the company's ability to execute a turnaround of its device or service businesses, and we continue to believe that there are better investments in the smartphone ecosystem than BlackBerry.”
BlackBerry Ltd. closed on Tuesday at $7.98.
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