Tuesday, November 29, 2011

RIM Surges 9% on Bernstein Upgrade and Birinyi Interview

Shares of RIM surged 8.15% intraday in Toronto (9% on the NASDAQ) and closed up 5.53% at C$17.95.  Analyst Pierre Ferragu from Sanford Bernstein upgraded the stock to a "hold" from "buy" today.  However, that upgrade alone likely would have resulted in a 3% rise in the shares.  More importantly, Laszlo Birinyi from Birinyi Associates said on CNBC that RIMM was one of his top 5 picks for 2012.



Just yesterday, Shaw Wu of Sterne Agee downgraded the stock from "buy" to "hold".  Meanwhile, Gus Papageorgiou reiterated an "outperform" rating on the stock, and said it was "absurdly oversold".

Looking Ahead to Q3 Earnings on December 15th

During RIM's Q2 earnings conference call, sell-through was an incredibly strong 13.7 million units.  In addition, even though BlackBerry 7 smartphones had been available for less than a month in Q2, sell-through for the new devices were very strong.  With the well-designed and popular Bold 9900/9930, RIM likely shipped at least 12.5 million smartphones in Q3.  The availability of the Bold 9900 at AT&T also likely provided a boost to shipments.  With Q3 having ended on November 26th, shipments also benefited from the launch of the Bold 9790 in Indonesia on November 25th.  Thus, it would be reasonable to expect the shares back in the high $20's and low $30's in 3 months.
   

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