Research firms Barclays PLC and Avian Research LLC have raised their respective earnings estimates for Research In Motion (RIM) following the company’s Wireless Enterprise Symposium, which is an exclusive showcase for RIM’s BlackBerry platform.
The show, staged this week in Orlando, Fla., highlights BlackBerry’s role in the smartphone market and appears to have impressed the equities research community.
Citing solid sales of RIM’s BlackBerry devices at both AT&T and Verizon Wireless, Barclays raised its earnings per-share estimates, saying it was convinced RIM’s projected net additions were conservative.
Barclays raised RIM’s second-quarter earnings per-share estimate to $0.97 from $0.96, its third-quarter estimate to $1.13 from $1.11 and its fourth-quarter estimate to $1.14 from $1.12.
Avian Research raised its long-term price target for RIM’s stock to $81.50 from $68 based on its full-year 2011 earnings per-share estimate of $4.53, a 16 percent increase over its estimates for 2010.
Avian Research said several drivers were in place to sustain RIM’s growth, App World and Mobile Voice System (MVS) initiatives, carrier partners in international markets and its product lineup.
“Further, we believe investors are becoming more comfortable with the company’s ability to sustain gross margin in the low-40% and manage OpEx for modest leverage. Together, this should result in better EPS leverage beginning F2H10. We view our model and price target as sufficiently conservative and expect an uptrend in revisions,” said Avian Research analyst Matthew Thornton in a report.
However, the company warned that ongoing competition from Apple could pose a risk when coupled with rising competition from Palm and Android- and Symbian-based handsets. Continued slumps in consumer-end demand and further deterioration in the enterprise market is also likely to impact RIM’s results.
