BlackBerry Ltd (BBRY) — This smartphone maker and wireless communications solutions provider is competing with some of the world’s best capitalized companies. It has fallen on hard times, and S&P Capital IQ rates the shares a “hold” due to concerns over subscriber losses and trouble rebuilding enterprise relationships.
Its analysts said they believe BlackBerry is “looking to turn itself around by transitioning away from a hardware company to an enterprise mobile device management play.” They estimate the company will narrow its losses to $0.31 per share in fiscal 2015 (ending in February) versus a loss of $11.18 in fiscal 2014.
But they note BlackBerry “has a long way to go to rebuild its relationships with enterprises.” And they voiced potential concern over the change in leadership following the resignation of the company’s CEO. Their 12-month target is $11, 2% below Friday’s close.
On Thursday, BlackBerry announced the launch of its BES12 device and a partnership with Samsung. Wells Fargo & Co (WFC) analyst Maynard Um said this will be a true test of BlackBerry’s turnaround. There is a market for its new products, he said, but the size of that market is difficult to estimate and enterprises typically start with small pilot programs. He rates shares “market weight” with a target range of $9.50 to $10.50.
Following its lows under $8 in April and May, BBRY stock began forming a bull channel, and in July, it flashed a golden cross and rose to a high above $11. The channel has a low of about $9.50 and a high of $12.54.
Even though buyers have driven volume up on spikes and the chart is now bullish, I would sell BBRY stock at the current price. A successful test of its recent high is unlikely considering the fundamental weakness and analysts’ misgivings.
