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(Paul Sakuma)
(Paul Sakuma)

Market Blog

For RIM, a rare upgrade Add to ...

What's this? An analyst has upgraded his recommendation on Research In Motion Ltd. , marking the first such upgrade on the stock in at least three months (at least, according to our scan of Bloomberg) - a period that has coincided with a profit warning and a 50 per cent slide in the share price.

Matt Thornton, an analyst at Avian Securities, raised his recommendation on RIM to "positive" from "neutral", with a price target of $45 (U.S.). But his enthusiasm for the stock is limited to his belief that sentiment on the stock is too low. Indeed, he argues that the company has lost the U.S. market for good and is being forced to live and die in international markets.

"The RIM installed base of smartphone users is already churning and going to the iPhone and Android," he said in an interview. "The new incremental smartphone buyer is not choosing BlackBerry, and I don't think that's going to change. I don't see anything on the horizon that that trend will not continue."

Without the U.S. market, RIM will have to look elsewhere - and there, there is hope. Mr. Thornton notes that the company has a couple of key products on the launchpad, which investors are probably underestimating.

"There are a couple of touchscreen products that I think will actually get very good traction in international sales late this year and into next year," he said.

As for RIM becoming another Nokia Corp. NOK-N - the company that has seen its market share and popularity erode so much that its share price has slid about 85 per cent since 2007, making the company look as though it is heading toward irrelevancy - there are hopes: For one thing, RIM doesn't have a low-end business like Nokia's, a segment of the phone market that is under particularly intense pressure right now.

RIM will report its fiscal first quarter results after markets close on Thursday, so there is going to be a lot of attention paid to this stock over the next 24 hours.

Follow on Twitter: @dberman_ROB


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