In a note to clients, RBC Capital Markets analyst Mike Abramsky cut his cost target on RIM shares to $29 from $35 and slashed his estimate for earnings per share for that current fiscal 11%, and for the next fiscal through almost 19%.
RIM shares lost more than 4% in order to close at $22. 73 on the Nasdaq on Wednesday.
Abramsky said RIM remains a potential buyout target because of its proprietary messaging services, global subscriber base and strong obvious portfolio. He valued a takeout at $30 a reveal and named Microsoft, Cisco, IBM and Nokia as feasible buyers.
An activist investor, Jaguar Financial, is talking to some of RIM's major shareholders about plans to empower RIM's board to check out options including spinning off patents or selling the whole company.
Abramsky's share-price target is still well above RIM's present share price, but the change moves RBC below the actual $31 average forecast of analysts. Analysts' forecasts for the share cost range from a low of $18 to a high associated with $75.
In February, RIM shares changed hands for around $70, but the stock has slumped after a number of profit warnings, coupled with the botched launch of it's PlayBook tablet computer, a competitor to Apple's iPad.
RBC's income per share estimates for RIM of $4. 95 for fiscal 2012 and $5 for 2013 are about 10 cents a share greater than the average analyst estimate.
RIM said last week it now expects to achieve only the low end of its previous forecast with regard to earnings per share in fiscal 2012, which ends within March. The company had forecast earnings of $5. twenty five to $6 a share.
Urging RIM's board to have a more active role in overseeing management decisions as the organization brings in new products, Abramsky said RIM's products and software haven't been competitive for years.
The company once dominated the actual smartphone industry with business-friendly devices, but it has battled as Apple's Phone and later Google's Android software possess gained market share, particularly in the United States.
Abramsky said the BlackBerry maker has lost credibility with investors by retracting and missing its forecasts.
RIM reported dismal second-quarter earnings last Thursday, delivering its shares sharply lower. It shipped far fewer BlackBerry smartphones and PlayBook tablets within the quarter than either the company or analysts had predict.
In a detailed earnings filing published on Monday, RIM said US sales within the quarter were halved from a year earlier to $1. 1 million, while sales outside the United States, Canada and Great britain rose 38% to $2. 3 billion.
RIM's global sales excluding america, Canada and Britain rose between 88 and 128% on an annual basis in each one of the previous four quarters.
Abramsky said RIM still has an opportunity to turn its fortunes around based on a sizable customer base of 70 million, support from carriers as an alternative solution to Apple and Android, global growth, and a powerful patent portfolio.
RIM has launched a string of refreshed phones upon its existing software and plans to launch another batch early next year while using QNX software found in the PlayBook.
It is expected to debut long-awaited PlayBook features including an Android app player in addition to email, calendar and other functions long associated with the BlackBerry in a developers' conference in October.
Moving to the powerful QNX platform gives RIM an opportunity to make its software competitive, but discarding its existing operating system forces developers that build applications for it to change how they operate.
"Four years after iPhone launched, RIM still has not launched competitive smartphone innovations or addressed its 'app gap', inch Abramsky wrote.
Abramsky said RIM had "lost the app battle and developer curiosity about BlackBerry has significantly diminished" making its successful emulation of Android even more vital.
RBC said that although RIM trades at just four times its fiscal 2011 earnings, it does not expect that valuation to enhance until RIM addresses its credibility gap.
Source : Business-Standard