RIM shares rise 17 per cent after analyst raises price target
Shares in Research In Motion jumped more than 17 per cent Thursday, continuing positive momentum after a National Bank Financial analyst said he was increasing his price target for the BlackBerry...
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TORONTO — Shares in Research In Motion jumped more than 17 per cent Thursday, continuing positive momentum after a National Bank Financial analyst said he was increasing his price target for the BlackBerry maker.
Analyst Kris Thompson said he’s boosting his target to $15 per share.
“We think there is more money to be made ahead of the 2013 launch of BB10,” Thompson said in a research note.
On the Toronto Stock Exchange, RIM shares gained $1.77, or 17.3 per cent, to close at $12, their highest level since earl in May. Almost 12.6 million shares were traded.
Thompson noted that RIM’s new management team is maintaining the BlackBerry smartphone subscriber base, managing costs and cash, and seemingly readying a February 2013 BB10 global product release, a month earlier than expected.
“We expect momentum to continue,” he said.
Thompson said an earlier launch will be beneficial to RIM.
“The shipments boost reflects about one more month of BB10 product availability, plus a little extra for the positive sentiment building in the industry from our discussions.”
RIM’s new BlackBerry 10 operating system — which will be unveiled on Jan. 30 along with its new line of smartphones — is widely considered a make or break product launch for the Waterloo-based smartphone maker.
“Let’s reiterate our short-term investment thesis. Buy the stock ahead of the BB10 product launch when we expect shipment estimates to increase, especially from U.S. brokers where a break in negativity could lead to short covering and ongoing stock momentum,” Thompson said.
Thompson said he has increased his estimate of BlackBerry shipments for fiscal 2014 to 35.5 million from 31.6 million, reflecting 4.5 per cent global market share, up from four per cent.
He said certification of the new BlackBerrys by wireless carriers is the key risk to his prediction and estimate of BlackBerry shipments. Carrier certification of the new devices can take time.
On Wednesday, RIM’s shares gained almost five per cent on the TSX even though it was reported that the U.S. National Transportation Safety Board had dropped the BlackBerry maker in favour of Apple’s iPhone 5.
Eric Jackson, president of Ironfire Capital LLC, which had bet on RIM shares to fall in the past, said he bought the stock on Wednesday because he expects a surge of upgrades from loyal BlackBerry customers.
“Most are greatly underestimating how many loyal subscribers will upgrade to BB10 in calendar 2013,” Jackson said today. “All those pending upgrades are currently not factored into the stock.”
Earlier this week, a prominent tech analyst gave RIM’s new operating system a small but improved chance of success.
Analyst Peter Misek of New York-based Jeffries & Company said Tuesday that he’s still giving the BlackBerry 10 operating system only a 20 per cent to 30 per cent probability of success.
With files from news services
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