Wells Fargo On BlackBerry: Sum Of Parts Implies Takeout Range Of $13.15 Per Share

Maynard Um of Wells Fargo on Thursday commented that shares of BlackBerry Ltd BBRY could be valued as much as $13.15 per share if it were to be acquired.

Um notes that assuming the majority of the company's intangible assets (patents, licenses and acquired technology) are related to patents and using a $7.6 billion ($14.42 per share) buyout price, this would value the core business at $4.4 billion ex-cash, or $9.03 per share.

“Our sum of the parts would suggest a total value of $13.15 per share assuming it can get 1x for its intangible assets ($2.77 per share credit only if it were to sell), 1.0x hardware revenue, 0.3x Services, and 4.0x Software and Other,” Um commented in his note. “Excluding the intangible assets would yield a $10.50 per share value.”

Um adds that Hardware will prove to be the largest variable from a multiple and revenue perspective. The analyst adds that the BES12 success and Hardware profitability could potentially yield a higher Software multiple and vice-verca.

However, Um states that shares are currently “fairly valued” and the analyst's Market Perform rating and $9.50 to $10.50 valuation range remains.