Morgan Stanley Warns on RIM (RIMM); Overhype on BB10 Makes Shares 'Un-Investable'

November 26, 2012 8:48 AM EST
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Research In Motion (Nasdaq: RIMM) is active in pre-market action Monday following a two-notch upgrade at CIBC to Market Outperform earlier.

However, Morgan Stanley is offering more advice on the stock today: stay away, stay far away.

Morgan Stanley analyst Ehud Gelblum says RIM's BlackBerry 10 (BB10) phones have "low chance" of success. The two factors for Gelblum are RIM's devices being too late and continued consumer shift to competitors.

The analyst sees RIM's services revenue to begin declining in the November quarter with BB10 not using network operations center in the same way as prior operating systems.

In the near-term, Gelblum sees RIM shares as "un-investable" due to noise around BB10 and chatter over possible strategic investments.

Morgan Stanley currently has RIM at Underweight with a price target of $7. Shares are up 2.5 percent in early trading.

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