Research In Motion Ltd(NASDAQ:BBRY)’s shares slumped 3.40% in early morning session as James Moorman, an analyst at S&P Capital IQ, trimmed his price target on the struggling phone company to $12, representing a potential fall of about 14% from the current price. The firm cited “based on sum-of-the-parts analysis and higher expected cash burn.”
Moorman now projects the company to have a loss of $1.23 in FY2013, compared to his earlier estimate of $1.21. for FY 2014, by 8 cents to a loss of 55 cents; and for FY 2015 by 8 cents, to 11 cents.
“We are concerned about carrier support for the Z10 U.S. launch, with only 3 of the top 4 carriers selling it,” he writes. “Several new handsets expected to launch this spring and summer could dilute the Z10′s impact. We believe many die-hard users may wait for the Q10 [which has a QWERTY keyboard], which we expect in May or June.”
The stock has been under pressure over the past couple of weeks amid several downgrades. Last week, two analysts had downgraded the stock.
Yesterday, Canaccord Genuity, which has adopted a bearish view of Blackberry, has cut down the handset maker’s sales estimate for its Z10 smartphones by 85 percent to 300,000.
The investment firm had don a channel research of Z10 sales and found that barely a couple of weeks after the launch of the smartphone, the sales momentum had slowed down due to supply constraints.
The Z10 smartphones, which have been released in the United Kingdom and Canada, come with a touchscreen and do not have the trademark keyboard input, which is a hallmark of Blackberry phones.
The phone is not available in the United States until March, a marketing strategy that has not gone down well with the analyst community, who feel that Canadian company has done damage to itself by ignoring the U.S. market at the outset.
Mike Walkley of Canaccord Genuity said that his interactions with wireless carriers indicated that they were cautious about placing orders for the new Blackberry smartphone. He also said that retail stores were showing modest demand.