Research in Motion Ltd. (NASDAQ: RIMM) had a really bad week. In fact, the huge drop seen Friday broke so far under the prior 52-week low of $80.20 that you would have thought the sky was falling. The sky is not falling, but this is what happens when beloved mega-growth companies post a second disappointing report in a row. To make matters worse, the company was cautious on margins out to 2010 rather than just in the near-term as its component costs are hurting margins on new product launches. As you will see, R-I-M lost a lot of ground in analyst coverage to the point that the cheering section is going to be much smaller for a while.
- Canaccord downgraded it to hold from buy, target cut to $72.75 from $185
- Citigroup downgraded it to hold from buy
- Deutsche Bank downgraded it to sell from hold
- Pacific Crest downgraded it to sector perform from outperform
- RBC Capital downgraded it to sector perform from outperform, target cut to $90 from $165
- UBS downgraded it to neutral from buy
There were actually some analysts that raised their ratings.
Credit Suisse raised its rating to a still cautious "neutral" from"underperform", but its previous $100.00 target is now $80.00. S&P boosted its rating to buy from hold, and slashed its $130.00 target to $110.00. Raymond James upped its rating to an"outperform" from "market perform" , but slashed its price target to$110.00 from $140.00.
JPMorgan maintained an "overweight" rating and Morgan Keegan maintained an "outperform" rating.
Jon C. Ogg
September 27, 2008
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