BlackBerry Ltd Approaches Its ‘Upper Boundary’ Of $10: Imperial

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BlackBerry shares have a resistance level at $10 stated an analyst at Imperial Capital. In a report which also previews the company’s earnings report scheduled to be released this week, technical analysts assigned a price target of $10 based on a sum of the parts valuation, noting that $1.25 billion in convertible debt can be exchanged for shares at $10.

Software revenue target doubted

The Imperial analyst did not appear confident when it comes to the ability of management to double the company’s software revenue to $500 million in fiscal year 2016. On the basis of industry conversations, Imperial concluded that BlackBerry has failed to bring in any major customers. The analysts also cited a competitor who said it has competed against BlackBerry in few RFPs.

BlackBerry will report its earnings numbers on March 27 before the market opens. The Imperial Capital analyst expects BlackBerry to post revenue of around $753 million with a quarterly loss of 5 cents per share.

BlackBerry earnings: What to expect

Analyst Tim Long at BMO Capital Markets is expecting a loss of 3 cents per share on $870 million in revenue for the fiscal fourth quarter of 2015. On an average, analysts are expecting the company to lose 3 cents per share and post $802 million in revenue. For all of 2015, Long is expecting a loss of 15 cents per share and has assigned a Market Perform rating to the stock with a price target of $10.

In a note issued last week, Long said he is expecting BlackBerry to have shipped 2 million smartphones in the February quarter and projects the Canadian firm to sell 1.9 million units in the May quarter. Around 1.7 million of the phones in the fourth quarter are expected to be BlackBerry 10 devices, whereas in the May quarter, 1.6 million units sold are expected to be BlackBerry 10 units. However, Long doubts the Waterloo, Ontario-based company will be able to ring in that number, given the limited availability of the Classic smartphone in the February quarter. Consensus estimates for BlackBerry 10 units in the quarter are at 1.5 million. For the February quarter, the average selling price is estimated at $236, while $232 is the average selling price estimate for the May quarter.

On Friday, BlackBerry stock closed down 1.8% at $9.81, while year to date, shares are down by almost 14%.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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