Deutsche Bank Comments on BlackBerry's (BBRY) Q3

Deutsche Bank maintained a Hold rating on BlackBerry (NASDAQ: BBRY) with a price target of $9. Comments follow Q3 results. Analyst Brian Modoff noted disappointing handset sales, but he thinks operating structure moved in the right direction.

"We maintain our Hold and $9 price target until we get a better understanding of the likelihood of enterprise customers converting to paying subscribers. At this point we are slightly negative on the outlook given our recent checks," said Modoff.

"Management has done a good job of maintaining their cash balance and focusing their efforts on returning to profitability. We do believe the company has a good chance for success, but it will simply be a much smaller version of itself. To date, they have executed on their plan. They have launched a bevy of handsets this year, with the last one being the Classic. It appears the Classic has been met with a relative warm reception. The only issue with great success here is that it would exacerbate the decline of service revenues, a source of high margin dollars," continued the analyst.

"The handset volumes and the number of listed, paying enterprise customers were discouraging. With handset volumes, we believe most expected at least a higher base of older model unit sales, with at least some stimulus from the Passport. Unfortunately, the base deteriorated more quickly than some assumed. The other point was BES 12 listed customers. We expected this number to be greater, or at least include a few more prominent names. It is early days here so we will give them the benefit of the doubt for now. This quarter the company was in more of a wait-and-see period, whereas the next two quarters will tell much," he added.

For an analyst ratings summary and ratings history on BlackBerry click here. For more ratings news on BlackBerry click here.

Shares of BlackBerry closed at $10.07 yesterday.

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