UPDATE: Canaccord Genuity Downgrades Research In Motion Ltd. (RIMM) to Sell, Fundamentals Still Stink

December 3, 2012 7:25 AM EST
Get Alerts RIMM Hot Sheet
Price: $14.64 +12.36%

Rating Summary:
    0 Buy, 0 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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(Updated - December 3, 2012 8:24 AM EST)

Canaccord Genuity downgraded Research In Motion Ltd. (NASDAQ: RIMM) from Hold to Sell with a price target of $10.00, saying the fundamentals do not support recent share appreciation.

"Over the past month, RIM shares have markedly increased ahead of the January 30 launch of long-awaited high-tier BlackBerry 10 smartphones. While initial sales of higher-ASP BlackBerry 10 smartphones should improve RIM's January and May quarter device sales and ASP mix, our checks and analysis of the global competitive landscape suggest a very low probability BlackBerry 10 sales can turn around RIM's long-term business trends", analyst T. Michael Walkley comments.

Walkley notes that high-ARPU consumers continue to switch from BlackBerry to sticky iPhone and Android ecosystems in droves. In addition, BYOD (bring your own device) trends continue to lower RIM's higher-ARPU enterprise base, and sub-$200 3G Android smartphones in emerging markets threaten RIM's global sales and subscriber base.

"While we believe BB10 is a dramatically improved user experience versus BB7 and RIM's new hardware is more competitive with higher-end smartphones, our checks do not indicate the consumer pull, carrier push, or developer excitement necessary for BlackBerry 10 to reverse the challenging trends faced by RIM in order to return the company to sustained profitability."

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 $11.60 yesterday.

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