Research In Motion (RIMM) Losses Major Bull; Downgraded Two-Notches, Sees Another 30% Downside
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Price: $14.64 +12.36%
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Jefferies downgraded Research In Motion Ltd. (NASDAQ: RIMM) two notches from Buy to Underperform and slashed their price target from $80 to $35, which suggests another 30 percent downside from the pre-open price of $50.
Jefferies analyst Peter Misek states, "In addition to lowered May Q guidance, our checks indicate RIMM will see continued execution issues, product delays, and lackluster product launches for the next year. We believe Blackberry OS 7.0 (renamed, formerly 6.1) and QNX will be delayed and that carriers are withdrawing support."
Misek also sees a ripple effect of Playbook execution issue, which has led to a fire drill and resources being pulled off of other projects. "We think this will cause BB OS 7.0 phones to be delayed and that QNX handsets will be pushed back until H2:CY12."
He also notes major integration issues with QNX. In addition, BB OS 7.0 handsets were delayed by a couple week and may not launch until later in the Aug Q or maybe the Nov Q.
On flagging carrier support, Misek said "indications include AT&T not yet supporting BB Bridge, carriers charging for Playbook tethering, and consumers cannot buy the Bold at AT&T. We believe this will result in lower subsidies and less marketing support for RIM.
The firm cut FY12 (Feb) EPS to $5.50 (guidance $7.50), FY13 to $5 (St $7.37)
For more ratings news on Research In Motion Ltd. click here and for the rating history of Research In Motion Ltd. click here.
Shares of Research In Motion Ltd. closed at $56.59 yesterday.
Jefferies analyst Peter Misek states, "In addition to lowered May Q guidance, our checks indicate RIMM will see continued execution issues, product delays, and lackluster product launches for the next year. We believe Blackberry OS 7.0 (renamed, formerly 6.1) and QNX will be delayed and that carriers are withdrawing support."
Misek also sees a ripple effect of Playbook execution issue, which has led to a fire drill and resources being pulled off of other projects. "We think this will cause BB OS 7.0 phones to be delayed and that QNX handsets will be pushed back until H2:CY12."
He also notes major integration issues with QNX. In addition, BB OS 7.0 handsets were delayed by a couple week and may not launch until later in the Aug Q or maybe the Nov Q.
On flagging carrier support, Misek said "indications include AT&T not yet supporting BB Bridge, carriers charging for Playbook tethering, and consumers cannot buy the Bold at AT&T. We believe this will result in lower subsidies and less marketing support for RIM.
The firm cut FY12 (Feb) EPS to $5.50 (guidance $7.50), FY13 to $5 (St $7.37)
For more ratings news on Research In Motion Ltd. click here and for the rating history of Research In Motion Ltd. click here.
Shares of Research In Motion Ltd. closed at $56.59 yesterday.
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