Wells Fargo on BlackBerry: Sale Unlikely in the Near Term

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Following meetings with BlackBerry Ltd’s BBRY CFO, Wells Fargo analysts dispel rumors that the company is on the auction block. Among their key takeaways, the analysts note that the company is not in liquidation mode due to its strong cash position. However, they do expect the company to explore other strategic alternatives, including restructuring, divestitures and multi-platform strategies – allowing for the potential of upside risk.

 

Management and investor sentiment diverge, as investors remain pessimistic, while management is “excited about its device roadmap.” On the downside, BlackBerry will struggle from uncertain BB10 demand and potential enterprise market share loss, according to the analysts.

 

The analysts place a price of $9.50 to $10.50, based on 1x EV/Sales. BBRY closed yesterday below $10 per share. 

Posted In: Analyst ColorAnalyst Ratings
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