Why Credit Suisse Sees BlackBerry Losing a Third of Its Value
December 21, 2015 by Jon C. OggBlackBerry Ltd. (NASDAQ: BBRY) has witnessed one of the greatest falls from grace and prime time in the modern era of consumer electronics. The company has a relatively new CEO in John Chen, and he is considered stellar for keeping things up better than they might otherwise be. The problem here is that some analysts and some investors are still very concerned about BlackBerry’s future.
Credit Suisse’s Kulbinder Garcha did raise estimates after the struggling handset and mobile operating system maker beat earnings. Garcha remains quite cautious here, with an Underperform rating and a very negative $6.00 price target. That is about one-third lower than the current share price.
BlackBerry shares were actually up more than 3% on Monday, trading at $8.89. Does that mean that the street is discounting what Credit Suisse has to say here? According to Garcha’s report:
BlackBerry reported results better than consensus with revenues of $557 million, EPS of -$0.03, and an underlying operating loss of $30 million (versus Credit Suisse’s -$53 million estimate). While the company may currently be showing possible signs of a recovery, we note that much of this strength can be attributed to intellectual property licensing sales of $53 million this quarter, which was structured with an upfront payment.
Credit Suisse’s $6.00 price target was reiterated, but the firm did raise estimates to -$0.29 earnings per share (EPS) from -$0.36 EPS for fiscal year 2016 and moved fiscal 2017 EPS to -$0.30 EPS from -$0.34 EPS.
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