Research in Motion shares drop on an update about the patent dispute with Nokia and then soar just hours later after an SEC filing showed a key hedge fund more than doubled its stake in the company.
Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) shares continue their climb this morning on positive news. Shares are up more than 7 percent in midday trades, and analysts at Goldman Sachs have upgraded their view on shares of Research in Motion (NASDAQ: RIMM) to Buy. They were previously rating the stock at Neutral.
Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) is expected to launch its new line of smartphones early next year. Its BB10 will be up against competition from the already-established iPhones and Android phones, which have virtually destroyed BlackBerry’s market share.
Goldman Sachs analysts improved their rating from Neutral to Buy because they said they see a positive risk / reward as we get closer to the launch of the BB10 at the end of January. They said this is the first time in three years that they think Wall Street is too low on its out-year estimates for the stock. Analysts at the firm are estimating a 30 percent chance of success for the BB10 because of attractive features, positive reviews, broad-based carrier support, and consumer interest in looking at phones other than the Android handsets and the iPhone. Goldman Sachs is lifting its 12-month price target to $16 from $9.
Analysts also say they believe Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM)’s results will exceed estimates from Wall Street over the next year. They are estimating 8 percent revenue and a quarterly earnings per share of 14 cents above consensus. Analysts also say they believe that the company will become profitable in February 2014, although the current consensus elsewhere is that the company will continue to experience losses.
Shares of Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) have been on a roller coaster in recent weeks, and even today signs of the ride were visible. Before RIM stock soared upon news of the major investment from Yacktman this afternoon, its shares dropped on the news that Nokia asked courts in a number of countries to uphold a ruling in Sweden that could bar RIM from using certain pieces of wireless technology that are protected by a patent.
It doesn’t look like the roller coaster ride for Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) will be up any time soon. Advice from key analysts on RIM is mixed. Tom Astle of Byron Capital Markets recommended earlier this month that investors buy the stock, but Wednesday he backed off that advice just a bit and said he sees the stock now closer to upside left. Other analysts are optimistic about Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) because a successful BB10 launch is expected.