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BlackBerry Limited Message Board

  • hockeyguy548 hockeyguy548 May 6, 2013 12:29 AM Flag

    Canaccord Genuity: Sell rating and $9 target for BlackBerry

    According to Canaccord Genuity:

    SLOWING Z10 SALES TRENDS; SOLID INITIAL Q10 DEMAND BUT SUPPLY LIMITED

    Investment recommendation: Our global surveys indicate mixed BlackBerry sell-through trends, with weakening sales of the Z10 over the past month but strong initial demand for the limited supply Q10. Given the weaker Z10 sales levels combined with more limited initial supply of the Q10 than our expectations, we are lowering our BB10 sellin estimates for the May quarter from 3.3M to 2.8M units. While we anticipate stronger near-term results for BlackBerry as higher margin BB10 smartphones sell into the channel, we do not believe BlackBerry can achieve sell-through market share levels to return to sustained profit levels. Therefore, we reiterate our SELL rating and $9 price target.

    Investment highlights

    - Given our store surveys indicated slowing Z10 sales at Verizon, AT&T, and T-Mobile combined with lower supply levels of the Q10 with a physical keyboard than our expectations, we have reduced our May quarter BB10 smartphone shipment estimates from 3.3M units to 2.8M units. Please see today’s report titled “Q1/13 handset market summary & April survey; Samsung poised for strong 1H/13 share gains” for more details.

    - With new BB10 smartphones facing increased high-end competition from the Samsung Galaxy S4 and the HTC One, we anticipate Z10 sales could further weaken in the consumer retail channels. However, we anticipate a strong ramp in Q10 sales over the next several months could more than offset the slower Z10 sales.

    - While we have lowered our BB10 estimates, we modestly lower our 2013 LPS estimates given our belief BlackBerry may temper nearterm marketing plans until supply levels of the Q10 improve.

    - Given our lower BB10 estimates primarily from our lowered Z10 sales assumptions, we reduce our F2014 LPS estimate from ($0.37) to ($0.44). Our F2015 LPS estimate of ($0.75) remains unchanged.

    Valuation: Our $9 price target is based on a sum-of-parts analysis.

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