Research in Motion Ltd. (NASDAQ: RIMM) is enduring yet another downgrade this morning. Today’s cut came from Jefferies & Co., who cut an already cautious rating of “Hold” down to the rating of Underperform. At other firms, that is the equivalent of a SELL rating. The firm’s price target objective is $15.00 and that is projecting a drop of more than 10% from the $17.21 close on Thursday.
RIMM’s biggest problem is not that it has a new CEO and not that smartphones are peaking. Teh secular theme in place is that iPhones from Apple Inc. (NASDAQ: AAPL) and Android phones from Google Inc. (NASDAQ: GOOG) are just sought after much more now by consumers. It also turns out that corporations and enterprises are no longer Blackberry-centric. The company has an edge on security, but no one seems to care one bit about that aspect of the matter. For those enterprises using Blackberry, many of the workers use a Blackberry for work and switch to an iPhone or an Android phone on nights and weekends. Sad but true.
This downgrade does not kill the chance of an ultimate buyout, but it implies that the best case scenario is what investors would call a “takeunder” where the buyout price is lower than the stock price.
RIMM shares are down almost 2% at $16.90 in the pre-market on more than 225,000 shares. As far as the 52-week trading range, all that matters now is the 52-week low. That sits down at $12.45.
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