BlackBerry (BBRY) Ramps on IBM (IBM) Takeover Talk, Enthusiasm for BlackBerry Live

May 9, 2013 12:37 PM EDT Send to a Friend
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Price: $10.33 +4.45%

Rating Summary:
    5 Buy, 41 Hold, 16 Sell

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    Up: 15 | Down: 28 | New: 20
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Shares of BlackBerry (NASDAQ: BBRY) are higher Thursday, in part on speculation that IBM (NYSE: IBM) could acquire the company.

Today's speculation was spurred by comments from Scotia Capital analyst Gus Papageorgiou, who reiterated his Outperform rating and C$22.35 price target ahead of the company's annual BlackBerry Live event next week (May 14-16).

The analyst said BES 10.1 will usher in mobile computing and could add $0.75 in EPS annually. "BlackBerry's updated server will allow iOS and Android devices to access corporate servers without the need for VPN. This makes BlackBerry's cross-platform solution very compelling and could help it gain market share in the mobile device management space" he said.

Papageorgiou also said watch for BBM to go cross-platform. "Because non-BlackBerry devices will be able to access BlackBerry's infrastructure, we believe the groundwork has been laid out to port BBM to other platforms," the analyst explains. "BBM could be used as incentive for enterprises to support BlackBerry Secure Work Space over competing solutions.

Also, given the recent confusion in the market, BlackBerry may give an update on BB10 volumes. Papageorgiou believes the Q10 is selling very well in the UK and Canada with stock outs at many locations. He estimates the company will sell approximately 3.6 million BB10 devices in FQ1.

On a possible IBM takeover, Papageorgiou said, "Even if we are wrong in our estimates and BlackBerry is unable to execute on the promise of BB10 we believe a strategic partner such as IBM is highly likely to acquire the company."

Investors should continue to accumulate the shares, he said. "We believe the Street's estimates for both hardware and services are too low. With the Q10 selling out and BES 10.1 providing cross-platform BlackBerry services, we believe BlackBerry is well-positioned to beat the Street."

For an analyst ratings summary and ratings history on BlackBerry click here. For more ratings news on BlackBerry click here.

Shares of BlackBerry are up 2.7 percent to $15.31 mid-day.


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