Canaccord Genuity Says RIM Shares Are Overpriced and Puts a 'Sell' on Its Stock

The Canadian Press, December 3, 2012 | Go to article overview

Canaccord Genuity Says RIM Shares Are Overpriced and Puts a 'Sell' on Its Stock


Canaccord Genuity says RIM stock overpriced

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TORONTO - Shares in Research In Motion are overpriced and the BlackBerry maker's new operating system likely won't return the company to profitability, says an analyst who has put a "sell" rating on the stock.

Canaccord Genuity analyst Michael Walkley has set RIM's share price at US$10 -- substantially lower than estimated share prices issued by other analysts in recent weeks.

Shares in Research In Motion (TSX:RIM) were down 10 cents to $11.49 after the report by Cannacord Genuity was issued.

While the BlackBerry 10 operating system is more competitive with Apple's iPhone and Android smartphones, there will be limited consumer demand, analyst Michael Walkley said Monday.

"Our checks do not indicate the consumer pull, carrier push, or developer excitement necessary for BlackBerry 10 to reverse the challenging trends faced by RIM in order to return the company to sustained profitability," Walkley wrote in a research note.

"As a result, we downgrade to 'Sell' based on our $10."

BlackBerry 10 will be unveiled on Jan 30 and is widely considered a make-or-break product for the Waterloo, Ont., smartphone maker.

Walkley said RIM will not be able to continue as it is.

"Given our belief that BB10 smartphones will struggle to gain sustainable traction in the highly competitive smartphone market, especially with a launch date post the important holiday season, we believe RIM may eventually sell assets, sell the entire company or materially change its business model to a smaller niche supplier. …

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