Credit Suisse Cuts BlackBerry (RIMM) to Underperform; Buyout/Split Unlikely, Limited Room to Grow

January 31, 2013 7:46 AM EST
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Price: $14.64 +12.36%

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    Up: 30 | Down: 30 | New: 23
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BlackBerry (Nasdaq: BBRY)(Nasdaq: RIMM) is ticking lower in early trading following a downgrade at Credit Suisse today.

Cradit Suisse downgraded BlackBerry from Neutral to Underperform, trimming its price target from $11 down to $10. The firm said it is unlikely that BlackBerry would be sold for an enterprise value of $5.3 billion and a break-up of the company is unlikely. The firm is also questioning the underlying value of its intellectual property rights (IPR) and sees limited value in network operations center (NOC).

Credit Suisse sees BlackBerry's NAV at about $3.1 billion, which is 40 percent below current levels, and thinks it would require and acquirer to shutdown its hardware business.

Looking ahead, the firm sees BlackBerry shipping 17 million BlackBerry 10 (BB10) devices in FY14, dropping to 15 million units in FY15. Smartphone market share will range from 1 percent to 2 percent. It's high-end portfolio -- that is, LTE-equipped devices priced at or above $400 -- will struggle against the likes of Apple (Nasdaq: AAPL), Samsung, and others.

Ahead of the bell Thursday, BlackBerry is down over 3.5 percent. (Note: RIM will officially change its name to BlackBerry on February 4th, with the ticker symbol 'BBRY.')

For an analyst ratings summary and ratings history on Research In Motion Ltd. click here. For more ratings news on Research In Motion Ltd. click here.

Shares of Research In Motion Ltd. closed at $13.78 yesterday.

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Bilal Jafar on 2013-01-31 09:17:07
Mark as Spam | Reply to this comment

No one can understand these investor's, when rimm rallied without any reason they upgrade it and now cutting rating

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