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Credit Suisse Sees Near-Term Support in BlackBerry Shares, Highlights Problems Possible Suitors Will Face

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Shares of BlackBerry (NASDAQ: BBRY) are trading sharply higher once again, now up more than 11 percent to around $12. The stock surged 10.5 percent higher on Monday following news from the company it is taking a look at options for strategic alternatives. BlackBerry shares have now rallied more than 37 percent from a recent closing low of $8.67 three Mondays ago.

The bounce in price comes amid what appears to be some skepticism from sell-side analysts over the course of Monday.

Jumping aboard the wagon Tuesday was Credit Suisse's Kulbinder Garcha. While the analyst said he is expecting some near-term support for the stock price, he pointed out "the company has been exploring all alternatives for some time following last year's announcement of a strategic review of its business." Garcha believes "there are few potential suitors given the challenge of turning around the company as fundamentals deteriorate."

Garcha named Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB), Microsoft (NASDAQ: MSFT) and Hauwai as possible suitors, along with private-equity parties, but said "each have cause for concern."

The Credit Suisse analyst said he remains "skeptical of BB10 traction as the devices are aimed at the high-end of the market (over $400), limiting the opportunity with strong entrenched competitors. Additionally, BB10 GMs below 25% make sustainable profitability difficult, especially given the company's push towards lower price points and levels of discounting." Garcha also highlighted visibility within the Services segment as "rapidly deteriorating."

Posted-In: Analyst Color News Analyst Ratings Movers

 

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