BlackBerry Downgraded at Bernstein

An upgrade one day. A downgrade the next. BlackBerry’s wild ride continues!

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler, CFA, is Lead Advisor on Discovery Canada 2017. He is also the Chief Investment Advisor for Motley Fool Canada and is the lead advisor on its flagship Stock Advisor Canada product. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published June 19, 2013 11:18 am EDT

| More on: BBBB

Can anyone else tell that BlackBerry (TSX:BB,NASDAQ:BBRY) is set to report earnings next week? For the first time in our brief history at Fool.ca, we have back-to-back posts on the same company. Exciting!

Yesterday, it was an RBC upgrade that helped move the stock higher. Today, it’s a Sanford Bernstein downgrade that has BlackBerry shares trading lower. Who’s next?

Bernstein has dropped its target for the company’s stock down to $10 from $15. This estimate was above $20 just a month ago.

The laundry list of items cited for today’s downgrade include:

Market expectations have increased significantly.
Slow take-up of the new devices reported by distributors and operators in Europe.
Google trends data indicating weak search volumes.
Weak sell-through market share data.
Weak enterprise demand with just 60% of Fortune 500 companies testing the new devices and only 29% of them actually using them.

All of these issues are expected by Bernstein to manifest in the second half of the year.

Foolish Takeaway

Nothing in today’s Bernstein report has anything to do with the long-term value of BlackBerry. The call is based on how the analyst expects the stock to perform over the next 9-12 months. Simply, until more time has passed with the new devices in the market, nobody knows what the future truly holds for this company.

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Fool contributor Iain Butler does not own shares of any company mentioned. The Motley Fool does not own shares of any company mentioned.