Alacra Pulse Prognosis: Research in Motion Ltd. Price Targets
Research in Motion (RIM) has come under pressure following rumors that Verizon (VZ) will begin offering a version of Apple’s (AAPL) iPhone early next year. While there is widespread expectation that Verizon will get the iPhone at some point, it is worth noting that the reports still have rumor status. Previous “confirmed” reports have proved to be premature at best. This uncertainty, along with differing views on how much of an impact it will have on the BlackBerry maker, contributes to a very wide range of 12-month price targets from analysts featured on Alacra Pulse.
Targets range from a low of $50 from Jim Suva at Citigroup Global to $100 from Peter Misek at Canaccord Adams.
Suva, who has a Sell rating on the company, lowered his price target from $55 last week, saying RIM’s presence in the corporate world could come under pressure as some companies are beginning to allow employees to switch to the iPhone or to Android-based devices.
In an April 27 note, Misek wrote: “We expect that the launch of the new OS, coupled with renewed operational momentum, will obviate a large part of the discount in RIM’s stock price over the coming months. We reiterate our BUY rating and $100 target price.”
Michael Abramsky at RBC Capital Markets, who still considers RIM a Top Pick, believes the market has overreacted to the expectation of a Verizon iPhone “While a headwind to Verizon share, actual impact on RIM may be less than feared.” Still, Abramsky has trimmed his price target by $30 to $90 over the last two months.
Steven Li at Raymond James this week upgraded RIM to Outperform with a $70 target, citing the company’s upcoming touchscreen phone and possible tablet.
Charles Wolf at Needham & Company, who also has a $90 target, thinks about 10 percent of RIM’s sales are at risk from a Verizon iPhone.
The median price target for RIM stock based on analyst estimates is now $85, according to Thomson/First Call. RIM closed today at $49.26.
The most recent price targets by analysts featured on Alacra Pulse are shown below. Click image to enlarge.
See also:
Alacra Pulse Check: A RIM Tablet By Year End?
Alacra Pulse Analyst BackCheck: RBC’s Abramsky on RIM
Pulse Check Update: Will a New BlackBerry OS Refresh RIM?
Pulse Check: BlackBerry Stuck in Apple Jam
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