Goldman Sachs Changes its Stance on Research In Motion

By: Jeff Stewart  |   December 1st, 2012   |   Business, Mobile Apps, News, O Canada, Smartphones

Since Research In Motion’s forthcoming line-up of Blackberry phones have received positive feedback from various developers and telecom carriers, the share price of its stocks have responded quite positively. This has also forced several analysts to change their stance on the Waterloo based BlackBerry maker, including leading brokerage firm Goldman Sachs, the latest addition to this growing group.

 

Goldman changed its stance on RIM’s share from “neutral” to “buy” and also raised its target price from $9 to $16 in their recent report. Company analyst Simona Jankowski noted that initial specifications of Blackberry 10 look pretty impressive and “with these devices RIM appears to finally be aiming for the leading edge hardware performance that was missing from its prior generations”.

 

RIM guarantees that its upcoming devices will be far smoother and faster than their predecessors. Moreover, the maker has also promised that BB10 will feature a huge catalogue of apps that are considered essential for the success of any smartphone. Jankowski also echoed a similar estimation, as she said that RIM will bring more apps in BB10 than expected because in comparison to other smartphone owners, BlackBerry users usually download more paid apps. Therefore, there is a beneficial union for both users and app developers.

 

On the other hand, RIM’s stocks rose once again yesterday, as around twelve noon its shares posted a gain of more than 6 percent by trading around $11.78 mark on the Nasdaq. The situation in Canada was also not much different from US as the stock price of RIM’s shares jumped up to C$ 11.72.

 

This rise in price must have also given hope to the investors, as several people are articulating that with the launch of the latest Blackberry 10 series, RIM would be able to take back a considerable amount of its market share from Apple Inc’s iPhone and Google’s Android based smartphones.

 

However, Wedge Partners analyst, Brian Blair thinks otherwise, according to him all these positive expectations from RIM’s shares are false hopes and investors should stay cautious. Blair said, “We believe the run-up in the stock miscalculates the reality of consumer demand for BB10 next year. … The fact is, the smartphone market has changed in the last 24 months, and RIM is not only late to the party, the party has moved to a different location and RIM is showing up at the wrong house”.

 

Source: Financial Post