Friday, March 28, 2008

Research in Motion (NASDAQ:RIMM): Two firms out positive

Two firms out positive on Research in Motion (NASDAQ:RIMM) this AM:

- RBC Capital is raising their tgt to $150 from $140 saying they are expecting inline Q4, with Q1 guidance expected materially above street on strong momentum.

Global checks indicate strong Q1 momentum, suggesting guidance for $2.1-2.2B revenue (up 12-18% Q/Q) and $0.81- 0.86 EPS, above street at $1.98B and $0.74 EPS, with 2.2-2.4M sub adds (up 1%- 11% Q/Q). Pending Q1 product launches/announcements include EV-DO Curve and 3G/HSDPA 'Comet'.

March data from RBC's Technology Adoption Panel (3,600 Respondents) sees RIM posting strong share gains against Motorola and Palm, with 15% respondents planning to purchase BlackBerry (up from 12% Oct and 7% Jan/07). Motorola's recent struggles are expected to further assist RIM share gains.

F09 ests become $10.3B (up 72% Y/Y), $4.05 EPS (prior $9.8B, $3.74) and F10 ests become $14.5B (up 41%) and $5.83 (prior $13.0B, $5.10).

- Piper Jaffray notes they believe BlackBerry continues to gain share from Motorola and overall RIM fundamentals remain strong. March checks indicated strong sell-through of the BlackBerry Curve at AT&T, Pearl and Curve at T-Mobile, and BlackBerry Pearl and 8830 at Verizon and Sprint. Given RIM management raised its February quarter subscriber forecast 15-20% above its previous 1.82M guidance and only reiterated its February quarter guidance, they anticipate RIM will report at the high end of its guidance or in line with PJ estimates of $1.87B and $0.70.

Firm is also increasing their device sell-in estimates for the May quarter from 4.6M to 4.9M units.

Based on increased BlackBerry unit estimates, they are increasing their FY09 EPS estimate from $3.40 to $3.59 and FY10 estimate from $4.49 to $4.67.

Notablecalls: These are powerful calls. Especially the RBC one as the firm has been pretty much the axe in the stock. I expect nothing less than $115 level in pre mkt with the stock taking out the recent $118 high by Tuesday.

I think the bears were pressing their shorts in RIMM yesterday and will be proven wrong today. But it's not just short covering that's taking RIMM higher here. The death (!) of Motorola is also a strong contributor. Sorry Carl.

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