Both the bulls and the bears are clawing at Research In Motion (NASDAQ: BBRY) and its new BlackBerry Z10, but who is right? So far this week, it’s the bulls who are being rewarded as the stock is up about 15.3% despite a 3.77% pullback on Thursday. The stock is also up 27.7% since the start of the year – not enough to ease the pain of investors who have been in it for the long term as the share price is still down around 85% over the past five years, but the trend is sure going in the direction of the bulls.
So what is the bullish case that Research In Motion and the BlackBerry are at least back from the bring? Here are some signs:
- Largest Single Order in BlackBerry’s History. At midweek, Research In Motion announced that one of its established partners had placed an order for one million BlackBerry 10 smartphones and these shipments would be starting immediately – marking the largest ever single purchase order in BlackBerry’s history. And while the partner’s name was unmentioned in the press release, we can probably safely assume its not a PR stunt by Research In Motion and it send shares surging.
- Goldman Sachs’s Simona Jankowski is Positive. Among the bulls is Goldman Sachs’s Simona Jankowski who just reiterated a Buy rating on BlackBerry shares with a $19 price target. She believes sales of BlackBerry Z10 handsets should rise from perhaps 500,000 last quarter to two million to three million for every quarter of this year. Jankowski also conducted retail checks at nearly 40 stores in the UK, Canada, UAE and India and she has this following handy table of debut dates and pricing info for the Z10 in various countries:
- Wells Fargo’s Maynard Um is Possitive. Another bull is Wells Fargo’s Maynard Um who apparently issued a note to clients saying that the new releases along with word of the dates for when Verizon will launch the Blackberry Z10, “gives us more comfort in our May quarter units of 2.5mn BlackBerry 10 units.” Um also has given an outperform rating on Research In Motion shares along with a valuation range of $19 to $20.
- Is BlackBerry Winning Over iPhone and Android Users? Forbes has a very comprehensive article summarizing much of a recent research note by RBC Capital markets, which purports to show that 45% of customers buying BlackBerry Z10s had converted from the iPhone or the Android. Moreover, RBC Capital markets noted that demand for Research In Motion’s legacy devices has not dramatically eroded and they expect the company to ship 6.3 million legacy units in the February quarter. The also expect the launch of the Q10 in April could boost sales. So for RBC Capital markets, RBC Capital markets is an $18 stock which, under perfect conditions, could jump to $24.
- Is the Samsung Galaxy S4 a Miss? It might be too early to conclude whether or not Samsung Electronics’ (KRX: 005930) new Galaxy S4 is a miss but an AP technology writer started out a review article about it by saying it has a “cute feature” we'll probably see in a lot of smartphones soon: front-and back-mounted cameras that can be used at the same time. Other than that, the author concluded it was hard to point to anything about the phone that will “set the world on fire” (Samsung Electronics’ shares on the Korean exchange have also been trimming some of gains it has recently made in anticipation for the Galaxy S4’s release). Of course, he might be a shrill for Apple (NASDAQ: AAPL) or Google (NASDAQ: GOOG) and it needs to be mentioned that a Galaxy S4 release will dump a bunch of new and old Samsung phones onto the market just as the BlackBerry Z10 is trying to gain traction.
Of course, the big test for Research In Motion will be in the coming weeks as it becomes more clear just what US customers think of the BlackBerry Z10, but so far it looks like the bulls are out of the pen on this one.