Monday, October 06, 2008

Research in Motion (NASDAQ:RIMM): Deutsche Bank lowers tgt to $50 from $70

Deutsche Bank is lowering their price target on Research in Motion (NASDAQ:RIMM) from $70 to $50 on concerns that the Bold will not ship on time at AT&T, causing RIM to possibly miss its quarter. The transition to a consumer-facing company has proven more challenging for RIM than expected. Pricing and margins are likely to remain volatile, meriting a Sell rating.

Firm thinks AT&T is unlikely to finish testing the new 3G Blackberry before the end of October, which makes it likely that the Bold will not ship until November, later than the company expects. While the Storm seems to be shipping on time at Verizon, they do not expect it to be readily available until mid-November and it is unlikely to be sufficient to offset the delay in the Bold. This raises the probability, in firm's opinion, that RIM will miss their November quarter guidance.

They thinks RIM may have bitten off more than it can chew. The company is pushing up against its limits in developing a 3G stack and other software for its new devices. The shift to a consumer-centric model has also eroded gross margins, increased ad expense and leaves the company further exposed to product cycles.

Notablecalls: Ouch. Just letting you know it's out there.

1 comment:

Pankajs said...

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