Goldman Sachs Removes Sell Rating from Research In Motion Ltd. (RIMM); Upgrades to Neutral on Sum-of-the-Parts
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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: 13 | Down: 28 | New: 13
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 28 | New: 13
Trade RIMM Now!
Goldman Sachs upgraded Research In Motion Ltd. (NASDAQ: RIMM) from Sell to Neutral with a price target of $18 (down from $22) saying a sum-of-the-parts supports the stock's valuation.
The firm said the stocks discount valuation of 3.8x their below-consensus CY12 EPS estimate already fairly captures their fundamental concerns.
Goldman is transitioning from P/E to sum-of-the-parts valuation for the stock, which they view as a more meaningful valuation methodology at this stage given the company's likely rapidly declining earnings trajectory.
The firm's sum-of-the-parts valuation assigns value to three assets: (1) its intellectual property (IP), (2) its Services cash flow stream, and (3) its cash.
Goldman sees the IP portfolio worth around $3.4 billion, the net present value of RIM's Services cash flows worth $4.8 billion, and RIM's $1.4 bn in cash and investments. In total it implies a value of $9.6 billion.
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 $19.13 yesterday, with a 52 week range of $17.17-$70.54.
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The firm said the stocks discount valuation of 3.8x their below-consensus CY12 EPS estimate already fairly captures their fundamental concerns.
Goldman is transitioning from P/E to sum-of-the-parts valuation for the stock, which they view as a more meaningful valuation methodology at this stage given the company's likely rapidly declining earnings trajectory.
The firm's sum-of-the-parts valuation assigns value to three assets: (1) its intellectual property (IP), (2) its Services cash flow stream, and (3) its cash.
Goldman sees the IP portfolio worth around $3.4 billion, the net present value of RIM's Services cash flows worth $4.8 billion, and RIM's $1.4 bn in cash and investments. In total it implies a value of $9.6 billion.
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 $19.13 yesterday, with a 52 week range of $17.17-$70.54.
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