Research In Motion Stock Surges on High PlayBook Expectations

11:18 am on November 30, 2010 | Category: Business, Cell Phones, Corporate, Mobile Devices, Multimedia

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Shares in BlackBerry manufacturer, Research In Motion, surged more than 6% this morning on the Toronto Stock Exchange, as analysts increased their expectations for the company’s ‘PlayBook’ tablet device.

Jefferies and Co. Inc. analyst, Peter Misek, upgraded RIM from Hold to Buy, giving the stock a target price of $80. (Yesterday’s closing value was $60.01.)

Dundee Securities analyst, Dushan Batrovic, also gave the stock a glowing review, maintaining his ‘Buy’ rating, and stating in a note to clients that “On our new [earnings per share] forecast, RIM is trading at less than 9x earnings … we believe this is too low for a company growing 30%+ top line and 40%+ bottom line.”

In addition to high hopes for the PlayBook device, RIM’s fortunes have also been boosted by improving sales of the BlackBerry Torch 9800. The much-hyped touchsreen smartphone performed poorly after its launch this summer, but sales have taken off ever since American wireless giant, AT&T, cut the cost of the phone in half.

Nevertheless, there are still some industry experts who believe investors’ hopes for the Torch and PlayBook are unrealistic. Susquehanna Financial Group analyst, Jeffrey Fidacaro, told clients earlier today that the PlayBook’s focus was too narrow to compete on equal footing with other more mainstream tablets, such as the Apple iPad and Samsung Galaxy Tab.

Selling 10 million PlayBooks, as some analysts have suggested, “may be challenging for RIM to achieve, particularly as the PlayBook is positioned as a ‘professional device’ and initially as a companion linked to a BlackBerry,” Fidacaro predicted.

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    1. If the demand is really there I don’t think it will be difficult for RIM to sell 10 mill or even more units despite the fact that the device is regarded as a professional(business) only device. The PlayBook is going to enjoy popularity from both the average users and the business users. If you sum it up that is well over 10 million units to be distributed.

      Comment by Simon — December 5, 2010 #

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