MKM Partners initiate Palm with “neutral”

MKM Partners initiate coverage of Palm Inc (NASDAQ: PALM) with a “neutral” rating. The six-month fair value for PALM is set for $11.

MKM Partners believes that expectations for Palm’s European launches are unrealistic. However, the consensus for PALM’s long-term prospects may turn out to be highly conservative, with the company’s Pixi mobile performing handsomely in 2010, MKM Partners adds.

MKM Partners expects Palm’s share price to be adversely affected in the forthcoming months by weak handset pricing across the industry. However, the launch of PALM’s WebOS via Verizon and AT&T might catalyze the company’s share price, MKM adds. With multiple events likely to impact PALM’s share price in the forthcoming months, MKM Partners expect the company’s stock price to be highly volatile.