Research in Motion (RIMM) reports fiscal Q3 results tomorrow afternoon, after the bell, and analysts are still putting together their views on the matter.
This afternoon, BGC Capital’s Colin Gillis reiterated his Sell rating on the shares, and cut his price target to $13 from $22, writing that “The company is on a declining trajectory and there is little reason to think this is going to change under the current management and with the current strategy.” He writes as well that “it is worth noting that the equity market is currently pricing RIMM to destroy value as shares are trading below its book value of $18.92 per share.”
Gillis’s main contention is that RIM has lost the high-end market for smartphones, is not set up structurally to be able to be successful in “entry level” smartphones, which is where the competition will increasingly be showing up in 2012.
As regards tomorrow’s results, Gillis’s estimate is for $5.21 billion in revenue and $1.23 in EPS for Q3, which is below the consensus $5.3 billion on the top line, but a little better than the average EPS estimate of $1.19. Pondering the question of whether RIM will offer a forecast for the current quarter, beyond what it pre-announced on December 2nd, Gillis remarks, “given the string of missed forecasts, it may be best for the company to stop that practice.”
Gillis doesn’t think the company is an acquisition target given its market cap of $7.8 billion is still “sizeable.”
RIMM shares this afternoon are down 60 cents, or almost 4%, at $14.88.
Previously: RIM: Berenberg Urges Opening of the NOC, Transparency, December 14th, 2011.
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