Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) shares initially rose almost six percent at the Toronto Stock Exchange and more than 3 percent at the NASDAQ after analysts at Societe Generale upgraded the stock.
Uncertainty Surrounds Research In Motion Ltd (BBRY)
Analysts Andy Perkins and Peter Knox issued a report to investors this week explaining why they upgraded it to buy from sell. Bloomberg estimates show that there’s a lot of uncertainty regarding Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s next earnings report, which is coming up in two weeks. Sales estimates range from $3.1 billion to $4.1 billion, and operating profits range from a loss of $100 million to almost $350 million in profits.
Checks Indicate BlackBerry Handsets “Selling Well”
According to Societe Generale’s checks, the Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s BlackBerry Z10 and BlackBerry Q10 are both selling quite well. They expect to see 4 million Z10 handsets sold in the quarter that will be reported this month. They also look for the Q10 to have sold a little less than 1 million handsets. They said they don’t have much evidence supporting sales of BlackBerry 7 handsets, which may mean that those sales have fallen off significantly.
The analysts said they found some evidence that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s situation is improving, especially in the U.K., which was one of the first markets where both of the two new handsets for launch. As a result, they updated their models to reflect better than expected handset sales.
Increases In Research In Motion Ltd (BBRY)’s Handset Sales
They raised their estimates for the company’s sales in the quarter that will be reported this month. They lowered their estimates for BlackBerry 7 handsets priced around $200 and raised their estimates for the Z10 and Q10 models. The result is $3.7 billion in sales for the quarter, compared to their previous estimate of $2.7 billion. They also raised their earnings per share estimate for the quarter from 0 cents to 6 cents per share.
Over the long term, they increased their sales estimates, bumping them up to almost 23 million Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s BB10 handsets this year, compared to their previous estimate of 16 million. Full-year earnings per share estimate was also increased by 20 percent to 85 cents from 71 cents per share.
After raising their forecasts, they increased their target price for Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) from $13 to $17 per share. The analysts said this month’s earnings report will be an important indicator just how well the company’s recovery efforts are going.