RIM analysts: Canada v USA

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When Research In Motion Ltd. issued a profit warning in late April, the share price was crushed and analysts busily cut their target prices and recommendations on the stock. What's interesting, though, is that the majority of revisions have come from Canadian analysts, while U.S. analysts have more or less held their ground.

I pointed out a couple of times ( here and here) that there had been a wide divide separating the views of Canadian analysts who track RIM from their U.S. counterparts, with Canadian analysts tending to be far more bullish on the stock. In September, when RIM shares traded for about $47 (U.S.) in New York, Canadian analysts had an average price target of $85.36 - a curious 44 per cent higher than the $59.13 average target among U.S. analysts.

Now, the difference has narrowed considerably. Since the profit warning, the average target price among Canadian analysts has fallen to $64.70. However, the average target price among U.S. analysts has hardly budged, falling slightly to $58.64. In other words, Canadians are still more upbeat about the stock than their U.S. counterparts, but the difference has fallen to 10 per cent from 44 per cent.

In September, I wrote: "This isn't nationalism at work. Instead, it is more likely due to the fact Canadian analysts tend to have fewer companies - and fewer marquee names - from which to make their top stock picks because they tend to be more focused on Canadian companies. Here, RIM is the name in tech. Therefore, the stock gets more attention."

Ah, those were innocent days. Now, with RIM's share price suffering and its popularity in decline, the U.S. analysts look far more prescient on the stock.

Meanwhile, former TD Newcrest analyst Chris Umiastowski - who now writes a blog - says he has doubled his position on RIM after attending the recent BlackBerry World conference in Orlando.

"Last week in Orlando I detected the return of BlackBerry enthusiasm among developers," he said. "QNX, Torch and TAT are the primary reason for this, helped by a partnership with Adobe. This technically savvy audience is buying into the reinvention of RIM.

"Why is this not reflected in the stock price? The Street is too distracted by the near-term shortcomings of the new products, such as the PlayBook, and RIM's recent profit warning, driven by a slip in BlackBerry 7 launch timing."

Sadly, he doesn't have a price target.