Canaccord Adams Downgrades Research In Motion (RIMM) to Hold

Canaccord Adams downgrades Research In Motion (Nasdaq: RIMM) from Buy to Hold and lowers its price target from $185 to $72.75.

The firm says Research In Motion's Q2 results were "light" and the company's guidance was "disappointing". Canaccord believes RIMM's management "is clearly showing a willingness to sacrifice near-term operating profits for the chance to become a tier one handset player as the world shifts from cell
phones to smart phones." While the firm does seem to believe in Research In Motion's long-term prospects, it feels that the apparent disconnect between the company's recent spending spree and top-line growth can not be ignored.

Canaccord lowers its FY09 sales estimate to $11.19 billion, versus the consensus of $11.07 billion, and EPS estimate to $3.66, versus the consensus of $3.80. For FY10, the firm sees sales of $15.7 billion and EPS of $4.85. These numbers compare to the Street estimates of $15.73 billion in sales and $5.39 in EPS.

The downgrade on Research In Motion is especially notably as Canaccord has been very bullish on the stock recently. In the firm's last several notes, it called RIMM its 'top pick' and reiterated its Buy rating several times ahead of the earnings announcement. At the beginning of September, the firm had a $225 price target on shares of Research In Motion.

Research In Motion Limited engages in the design, manufacture, and marketing of wireless solutions for the mobile communications market worldwide.

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