GMP Research bumps RIM target big time
Now that RIM’s (RIM:TSX) market cap. is well above the Royal Bank’s (RY:TSX), perhaps Canada’s technology industry will start to attract more investment capital. Here is this morning’s RIM note from our friends at GMP Securities.
“Raising forecasts on new product growth
• Raising forecasts: We are raising our forecasts and target based on higher growth from new
product launches and continued positive feedback from wireless network operators.
• New BlackBerry Bold: The high-end 3G model for GSM network operators should boost sales
when shipments begin in summer.
• More new products to follow: We expect more product launches this year including likely clamshell and touchscreen models. We expect RIM to continue to gain share vs. MOT and NOK. Discussions with several wireless network operators which continue to suggest strong growth ahead for RIM. In the past week, we spoke with contacts predominantly at U.S. carriers but also two overseas carriers, as well as a few software developers. Generally the industry
contacts offered very strong positive views on prospects for RIM to continue to grow in the
enterprise market and some mainly positive views (but less conviction and less information) on
RIM’s prospects in the consumer market. Some dissension also is worth observing: two carrier contacts expressed positive views on Apple’s iPhone and one expressed low confidence in
RIM in the consumer segment (due to Apple’s strength.) That said, generally the information
was no less bullish on RIM in the enterprise than ever (“Microsoft needs to catch up” is a
theme we’ve heard for many years that continues to be commonly held.) Moreover, a handful
of the contacts were strongly bullish on RIM in the consumer market either based on products
they had seen but couldn’t discuss or based on their history of successful dealings with RIM
over many years. Anecdotally, two U.S. network operators said they had seen a surge in
Blackberry sales due to the low-cost Pearl and Curve models appealing to consumers.
• Target and forecast: Our new target of US$190 [from US$150] is based on premium 35x multiple of F2010 EPS of US$5.45. We maintain our BUY rating.”
(disclosure – I own RIM)