Analysts skeptical as RIM reviews strategy

Wed May 30, 2012 1:57pm EDT

A logo of the Blackberry maker's Research in Motion is seen on a building at the RIM Technology Park in Waterloo April 18, 2012. REUTERS/Mark Blinch

A logo of the Blackberry maker's Research in Motion is seen on a building at the RIM Technology Park in Waterloo April 18, 2012.

Credit: Reuters/Mark Blinch

Related Topics

(Reuters) - Research In Motion Ltd's move to hire bankers for a strategic review and scout for partnerships prompted a slew of price-target cuts from analysts, who were skeptical about the BlackBerry maker's ability to attract a buyer.

The company on Tuesday said it hired bankers from J.P. Morgan Securities LLC and RBC Capital Markets to help evaluate its strategies.

"A potential buyer remains uncertain, and potentially a long shot in our judgment," analysts at Robert W. Baird said, adding they would be surprised by an acquisition by an existing OEM.

"Microsoft is likely to be rumored, though given its focus on Windows 7 and 8, that seems increasingly unlikely to us," they said.

BMO Capital Markets, which too cut its price-target on the stock to $9 from $11, does not see a buyer either for the device business or the network business.

The Waterloo, Ontario-based company is struggling to retain its top talent after a series of high-level executive departures in recent weeks, and now finds itself struggling in the smartphone market, trailing Apple and other rivals.

"We continue to remain cautious on RIM and are reducing our estimates ... We believe that the company's integrated strategy is too far behind Apple's," Wedbush Securities said in a note.

However, JMP Securities upgraded RIM stock to "market perform" from "market underperform" after the company issued the cautionary update, largely based on valuation.

RIM's U.S.-listed shares were down 8 percent at $10.29 before the markets opened on Wednesday. They closed at $11.23 on Tuesday on the Nasdaq.

(Reporting by Fareha Khan in Bangalore; Editing by Sreejiraj Eluvangal)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
they have a loser ceo… it is a stupid company… they should have someone from outside not inside… they need a big change but it is late now…

May 30, 2012 10:51am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.