Merrill Finds Research In Motion "Underappreciated"

| About: BlackBerry Ltd. (BB)
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Research in Motion (RIMM) shares were higher yet again Wednesday, this time propelled in part by positive comments from Merrill Lynch analyst Vivek Arya.

Arya raised his price target on the stock to $140 from $120.

Arya notes that Sprint (NYSE:S) Wednesday announced plans to start selling the latest version of the Blackberry Pearl next month. Arya says Sprint is moving “aggressively” to lower the monthly data plan to about $25 a month from $40-$50, a move similar to one T-Mobile recently made. “Lower monthly fees should drive faster adoption” of the companies' handsets, he says.

Arya thinks Verizon (NYSE:VZ) will introduced the Pearl on November 1, and likewise bring data plans down to the $25-$30 level.

“We view Sprint’s and Verizon’s new expected data pricing to be a direct answer to [AT&T’s] (NYSE:T) success with Apple’s (NASDAQ:AAPL) iPhone,” he writes. “Blackberry’s products seem to offer [an] attractive alternative to messaging users, a weak area for the iPhone.”

The most amazing statement in this report might be this one: “We believe RIM’s investment case is underappreciated.” He notes that the company is expanding into new areas, including collaboration software, Wi-Fi hot-spot-at home, location based services and enterprise Blackberry/PBX integration. “Also, with only 11 million subscribers and 1% handset market share, we feel the company has merely touched the tip of the iceberg, when it comes to future growth and profitability,” he writes.

For the year to date, “underappreciated” RIMM is up 174%.