Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s 40F filed on March 28 has some very bullish guidance in it, and analysts at Morgan Stanley (NYSE:MS) like what they see.
Of course Morgan Stanley analysts aren’t the only ones who like the BlackBerry’s odds of performing well this year. CNBC’s Money Madness tournament, which advances stocks based on the votes of Squawk Box viewers, showed an overwhelming majority who favor Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) over Apple Inc. (NASDAQ:AAPL).
In a report issued to investors this morning, analysts at Morgan Stanley point out just how bullish the BlackBerry maker is on itself. The company guided for $1.2 billion of intangible amortization during fiscal year 2014, compared to just $300 million per quarter on average in recent quarters.
The analysts said the most important thing to realize about Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is that the company’s restructured license agreements are more dependent on volume than they have been in previous quarters. They believe this implies that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is guiding for its average quarterly unit volume in fiscal year 2014 to be up at least 50 percent from its fiscal fourth quarter volume of 6 million units.
They said the company’s hardware gross margins fell 27 points to negative 1 percent in fiscal year 2013 except for restructuring charges during the year and inventory provisions from fiscal year 2012. However, their calculations indicate that the company’s device gross margins increased 15 points quarter over quarter in the fourth fiscal quarter of 2013.
In Morgan Stanley’s view, the positive shift of higher gross margins and average selling prices that began in the fiscal fourth quarter of 2013 is sustainable, which means the stock could go higher slowly. They reiterated their ‘overweight’ rating on the stock.
At the moment of this writing, shares of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) were down 1.7 percent on the opening price at the NASDAQ.
