RIM Upgraded on Strong Growth

Canaccord Adams analyst Peter Misek Wednesday afternoon raised his rating on Research In Motion (RIMM) to Buy from Hold, maintaining his price target on the stock at $95.

Misek says he is making the move following a recent 23% slide in the company’s stock price, as well as positive recent channel checks. He says that, according to global carrier contacts and partners, the company “delivered a healthy month of June, beating internal expectations.”

Misek contends the launch of the Palm (PALM) Pre and the Apple (AAPL) iPhone 3GS “has done little to disrupt RIMM’s momentum and may have in fact benefited the company as competing carriers aggressively position BlackBerry as an alternative.”

I would note that Piper Jaffray’s T. Michael Walkley today asserted the exact opposite view - that the company had a weak June, and that the company actually is being hurt by the Pre and the iPhone 3GS.

Misek asserts that BlackBerry sales at AT&T (T) grew double digits month over month in June despite the iPhone 3GS launch, and adds that there has been “no loss of momentum” with the BlackBerry Tour to launch July 12 with both Verizon (VZ) and Sprint (S). He also thinks the Storm 2 could be pulled forward to an August launch.

Misek says that with the stock now trading at 14x forward 12 months earnings, he is “more comfortable with the company’s risk/reward profile.” While he is still concerned about weak consumer spending, he contends that “RIMM has demonstrated an ability to grow in very difficult conditions due to its stronghold in the enterprise and strong carrier relationships.”

RIMM Wednesday fell 74 cents, or 1.1%, to $65.62.

Original post

Comments

[SharonW:]

Not just snagging sales from RIMM now, but going forward:

"As consumers plan to purchase more smartphones than ever, future demand for Palm and Apple devices also continues to surge, according to recent survey data collected by ChangeWave.

...While a March survey indicated only four percent of surveyed individuals expected to buy a Palm in the next 90 days, the group has doubled to eight percent in the June data.
...Approximately 44 percent of respondents anticipate purchasing an iPhone in the next 90 days, marking a 14 percent increase from March.
...Demand for RIM products slid by 14 points, although the numbers coincide with a natural slowdown following several earlier launches.

Chart:
www.electronista.com/a.../

Jul 09 12:53 AM