Wells Fargo Cuts Price Valuation Range on RIM (RIMM) by 42%, Limited Visibility in its Model
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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: 14 | New: 11
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo is reiterating its Market Perform rating on shares of Research In Motion Ltd. (NASDAQ: RIMM), but is lowering its valuation range from $58-$60 to $33-$35, a 42 percent cut.
The company reported its Q1 results on June 16 slightly inline with expectations, while commenting that its previous FY12 guidance of $7.50 was well above its capability. RIMM lowered its guidance to a range of $5.25-$6.00.
The firm reports the cut doesn't surprise them, but the magnitude of it does. As a result it is lowering its FY12 revenue and EPS estimates from $24.4 billion and $6.67 to $19.4 billion and $5.14. It is also lowering its FY13 estimates from $25.9 billion and $6.69 to $21.1 billion $4.86.
RIMM did announce its plans for cost restructuring and that its board approved a buyback of 5 percent of its outstanding shares. Managements guidance range of $5.25-$6.00 does not include or account for any buyback.
An analyst at Wells Fargo states, "on the call, RIMM's CEO indicated it now expects the 4G version of the Playbook to be shipped in the Fall vs. prior hints of a summer launch. While not a significant delay, it still represents yet another datapoint that shows RIMM continues to come to market with new products slower than planned."
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 $35.33 yesterday.
The company reported its Q1 results on June 16 slightly inline with expectations, while commenting that its previous FY12 guidance of $7.50 was well above its capability. RIMM lowered its guidance to a range of $5.25-$6.00.
The firm reports the cut doesn't surprise them, but the magnitude of it does. As a result it is lowering its FY12 revenue and EPS estimates from $24.4 billion and $6.67 to $19.4 billion and $5.14. It is also lowering its FY13 estimates from $25.9 billion and $6.69 to $21.1 billion $4.86.
RIMM did announce its plans for cost restructuring and that its board approved a buyback of 5 percent of its outstanding shares. Managements guidance range of $5.25-$6.00 does not include or account for any buyback.
An analyst at Wells Fargo states, "on the call, RIMM's CEO indicated it now expects the 4G version of the Playbook to be shipped in the Fall vs. prior hints of a summer launch. While not a significant delay, it still represents yet another datapoint that shows RIMM continues to come to market with new products slower than planned."
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 $35.33 yesterday.
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