Tuesday, March 30, 2010

Research In Motion Limited (RIMM) $RIMM [credit Suisse] Price Target $95

F4Q Preview
Results on Mar 31, maintain above consensus estimates. Given our expectation for robust smartphone industry growth (230mn/293mn units in 2010/2011, +35%/+27% yoy) and our view that RIM's global smartphone share is sustainable at 20-21%, we maintain our FY11/FY12 revenue and EPS estimates of $18.9bn/$21.1bn and $5.45/$6.00. Our EPS estimates are 7%/13% above consensus, and we retain our Outperform rating on RIMM (CS focus list stock) with a target price of $95.
F4Q10 results: solid trends at Verizon, international momentum could
drive upside. We believe that RIM's volumes at Verizon have proved more
resilient despite the introduction of the Droid and Palm devices at the carrier in recent months. This along with signs of reengagement with AT&T, and continued international momentum (driven by the 8520 and Bold 9700), suggests that upside is possible to our/consensus F4Q volume estimates (11mn units, +9% qoq) and company guidance of 10.6–11.2mn units. In addition, we believe Bold 9700 (ASP of $415) strength will roughly offset the 8520's lower ASP (we estimate $245) driving ASP of $320 (flat q/q), in-line with guidance and our estimate. Overall, we forecast F4Q revenue/EPS of $4.3bn/$1.27, in-line with consensus.

F1Q11 guidance: upside depends on timing of new launches. For F1Q we forecast volumes/ASP of 10.8mn (down 2% qoq) and $307 (down 4% qoq) resulting in revenue/EPS of $4.1bn/$1.18 vs. consensus at $4.3bn/$1.21 respectively. We believe upside to our current volume estimates largely depend on the timing of new product introductions – notably the Pearl 9100 and the Storm Slider – over the next few months. Webelieve WES in late April is a likely forum for new product announcements.  HOME PAGE

Research In Motion Limited

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