BlackBerry has long been seen as a buyout target. Despite CEO John Chen on many occasions denying the possibility, still many had doubts. However, the firm’s latest move sends a clear signal that is it better off on its own, believes Wells Fargo analyst Maynard Ulm.
Good Technology a good fit for BlackBerry
A few days back, BlackBerry announced the acquisition of Good Technology for around $400 million. The deal, according to Ulm, is a decent one, and sort of confirms the Canadian firm’s intentions of creating its own path rather than being acquired. The acquisition of Good highlights the firm’s clear focus on software, and Ulm believes the acquisition will help BlackBerry in its turnaround efforts.
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Good Technology’s acquisition serves multiple purposes for BlackBerry. The deal will give BlackBerry a “stronger foothold” among the Android and iOS devices, boost the company’s Internet of Things efforts, and will also benefit from “infrastructure and technology perspective,” the analyst noted.
Following the acquisition, a “potential sale of the company is less likely in the near term, we believe BlackBerry will likely look at other strategic alternatives — further restructuring, potential divestitures, aggressively target multi-platform strategy,” Ulm noted.
Stock is downtrend
Separately, in a note on Tuesday, Morgan Stanley reiterated an Equal-Weight rating on BlackBerry with a price target of $7. In addition, CIBC World Markets on the same day raised the price target on the Canadian firm to $7.25. The research firm has a Sector Perform rating on the stock. MKM Partners on Tuesday lowered the price target of the stock to $8, and gave a Neutral rating.
Of the thirty-two analysts covering the stock, three consider it a buy, 18 rate it a hold, while 11 see it as a sell. According to Thomson/First Call, the highest and lowest price target on the stock is $14 and $5, respectively. Presently, BlackBerry has a 12-month average target price of $8.79.
In the last 200 days, BlackBerry has lost over 32%, and is showing a strong down trend. In last 50 and 100 days, the stock is down 15.64% and 26.98%, respectively. Year to date, the stock is down almost 33% while over the last year, it is down almost 28%.
As of around 11.40 am EDT Wednesday, BlackBerry was down 0.54% at $7.35.