Research In Motion Ltd (NASDAQ:BBRY) has recently, depending on which market-share survey you see, lost its hold as the No. 3 smartphone operating system option for consumers, dropping behind Windows Phone by Microsoft Corporation (NASDAQ:MSFT). But unlike the last couple of years, BlackBerry and its BB10 operating system have at least created buzz and conversation about the company again to where it and its stock are once again relevant and in the spotlight.
So the comeback was kind of on hold for a bit, until the company launched two physical-keyboard smartphones, the Q10 and the mid-range Q5. With many of BlackBerry’s 76 million subscribers having loyalty to the brand due to its keyboard on other devices, there was some curiosity about how these keyboard devices will fare in the marketplace. Was there a pent-up demand by users to upgrade their BlackBerry devices?
According to one prominent analyst, Research In Motion Ltd (NASDAQ:BBRY) will be primed to see its comeback finally take hold in the quarter just completed and the current one. Jefferies analyst Peter Misek, who has covered BlackBerry for a while now, made a prediction that BlackBerry not only will beat Wall Street estimates for the May quarter when it announces its earnings later this month, but he went out further on his limb and predicted that BlackBerry will also top estimates for the August quarter as well. He believes that the company will sell more than the Street’s estimate of 3 million devices during the May quarter, and the August quarter he expects to be “materially higher” than the 3-million mark.
Analysts are reportedly expecting an EPS of 4 cents on $3.3 billion in revenue in the May quarter and an EPS of 10 cents on $3.3 billion in revenue in the August quarter. Misek says he sees Q10 sales to be strong, and he believes that BlackBerry Messenger (BBM), which will soon be available on both iOS and Android platforms, can be a huge potential gain for Research In Motion Ltd (NASDAQ:BBRY). “BBM could possibly expand BlackBerry’s ecosystem and increase its relevance,” Misek wrote in a research note. “[There’s a] possibility that BlackBerry could be a viable competitor to highly-valued WhatsApp.”
What does Misek see for 2014 out of Research In Motion Ltd (NASDAQ:BBRY)?
Apparently riding the momentum of the Q10 and Q5 handsets – and with a couple of new devices in the works for later this year and early next year – Misek gives a still pretty-bullish outlook for BlackBerry in the next calendar year. While analysts are generally expecting BlackBerry stock to trade at a P/E of 12 in 2014, Miske sees it rising to a P/E of 15. With that, Misek set a 12-month price target of $22 per share and gave the stock a buy rating.
What are your thoughts? Does Research In Motion Ltd (NASDAQ:BBRY) have the pieces in place to make its comeback as Misek predicts? Can the physical-keyboard smartphones save the company and keep it relevant? Give us your thoughts in the comments section below.
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