Published — Saturday 19 January 2013
Last update 18 January 2013 11:35 pm
TORONTO: Shares of Research In Motion Ltd. rose 4.6 percent after an influential analyst boosted his rating on the stock, saying RIM’s new BlackBerry 10 devices performed as well or better than rivals in recent tests.
Jefferies & Co. analyst Peter Misek, who lifted his stock rating on RIM to “buy” from “hold,” believes Wall Street was underestimating the strength of RIM’s financial performance after the new devices debut on Jan. 30. He also lifted his price target to $ 19.50 from $ 13.
The stock jumped 4.6 percent to $ 15.59 on the Nasdaq and rose 5.5 percent to C$ 15.51 on the Toronto Stock Exchange.
RIM hopes the re-engineered line of touch-screen and keyboard devices will help win back market share lost to rivals such as Apple Inc’s iPhone and devices powered by Google Inc’s market-leading Android operating system.
Misek, who has been skeptical for some time about RIM’s odds of engineering a turnaround, said recent trials of BB10 test devices showed vast improvements over its existing smartphones.
“Recent tests and demos have shown a solid browser, smooth touch interface, and intuitive navigation. We now believe the operating system performance could be better than or equal to Android Jelly Bean and likely on par with iOS 6,” said Misek, referring to the latest versions of software powering Android and Apple devices.
Shares of RIM, which fell as low as $ 6.22 in September, have more than doubled in value over the last four months as the BB10 launch approaches.
In November, Misek upgraded RIM’s stock to “hold” from “underperform,” arguing that his checks revealed greater carrier support for BB10 than expected.
Misek’s last upgrade had propelled RIM’s shares into double-digit territory for the first time in five months and his latest upgrade pushed the stock to a new 11-month high.
In his latest note, Misek said: “More recent checks indicate that carriers have also agreed to volume commitments for the first two quarters post-launch.”
He said BB10 build orders rose from about 500,000 a month in early December to between 1 million and 2 million a month. Misek now views initial sales of 4 million Blackberry 10 devices a quarter as “not a high hurdle.”
Additionally, developer support was proving to be stronger than expected, noted Misek.
“Our checks indicate that large app developers are going to put resources into developing BB10 apps,” he said. “Previously we had thought they would take more of a wait-and-see approach before committing resources.”