RBC Capital’s Mike Abramsky this morning reiterates a Sector Perform rating on shares of Research in Motion (RIMM), and cut his price target to $29 from $35, while arguing that the stock won’t move until the company tackles four “key issues.”
First, the shift of the BlackBerry to the “QNX” operating system, presumed to come sometime early next year, will have to return RIM to its focus on “innovative, bold user experiences,” he writes.
“Four years after iPhone launched, RIM still hasn�t launched competitive Smartphone innovations or addressed its �app gap�.”
Second, RIM has to execute better, vis a vis shipping the recent BlackBerry 7 models late, and admittedly fumbling the introduction of its “PlayBook” tablet computer. The competition is on their “A game,” he argues.
RIM has a “credibility gap” with investors because of poor forecasting in past quarterly reports.
And last, the board of directors needs to provide a more active “check and balance” to management, he thinks.
Nevertheless, he concedes, “RIM retains a turnaround window (70M subs growing 40%, international strength), and carriers still support RIM as a candidate for their �3rd platform�.”
RIM shares today are down 56 cents, or 2.4%, at $23.16.
Previously: RIM: Low Inventory, Buy Why? Ask Morgan Keegan, September 20th, 2011.
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