Shares of Research in Motion Surge on Analyst Optimism

Andrew Klips  |

While Americans were taking Thursday to spend with their families and celebrate the Thanksgiving holiday, shares to Toronto-listed Research in Motion (RIMM) were tracking higher on the second-best volume day since June of 2010.  Shares closed 17.3 percent higher on Thursday at $12.00 with 12.6 million shares changing hands, the biggest one-day gain since April 2009.

Once considered Canada’s tech darling, shares of RIM had fallen from about $70 in February 2011 to a low of $6.10 in September as debt problems and fleeting sales had investors and analysts questioning whether the BlackBerry maker would survive.  Going back even further, shares were trading at $150 per share at peaks in June of 2008.  RIM has been struggling to maintain market share with competitors like Google Inc. (GOOG) with its Android software and Apple, Inc. (AAPL) with its iPhone line now commanding the lion’s share of sales.

The climb on Thursday, shaved RIM losses for 2012 to 19 percent.

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Over the last two months, Research in Motion has had life breathed back into it on optimism for the release of the BlackBerry 10, the Waterloo, Ontario-based companies latest operating system.  RIM plans to unveil the operating system, along with two of its newest smartphones, at a January 20 event.  The new smartphones are slated to be available in multiple countries in February.  For most, the success of BlackBerry 10 is a make-or-break proposition for the beleaguered company.

Jeffries & Company analyst Peter Misek gives the BB10 operating system a 20 to 30 percent chance of success.  A vocal critic of RIM in the past, Misek on Tuesday boosted his assessment from a prior estimate of only a 10 to 20 percent chance of success, citing Jefferies quarterly handset survey indicating “developed market carriers have a much more positive view of BB10 than we expected.”

Also helping drive shares north this week, National Bank Financial analyst Kris Thompson raised his price target this week for U.S.-listed shares of RIM from $12 to $15 while maintaining a “buy” rating for the stock.  Thompson also said that he expects 35.5 million shipments of the new BlackBerry phones in 2013, up from his original estimate of 31.6 million.  If Thompson’s predictions are correct, RIM will capture about 4.5 percent of global market share.

At the opening bell on Friday, Nasdaq-listed shares of Research in Motion jumped ahead by nearly 12 percent to $11.50.  Markets close at 1 PM ET on Friday as part of the Thanksgiving holiday observation.

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