RIM: Citi Says Outlook "Binary"; Coin Toss, Anyone?
From Citigroup’s Jim Suva this morning comes the mother of all Research in Motion (RIMM) reports, 21 pages long, under the title “Outlook is Increasingly Binary.” Suva says that given uncertainty as to whether RIM’s recently announced new BlackBerrys will hit the market in time for the holidays, there is a wide swath of estimate revisions that are possible, up or down, for the company’s earnings.
Writes Suva, “Investors are unsure if Bold will hit AT&T (T) and if Storm will be at Verizon [Communications' Verizon Wireless] (VZ) in time/scale for the holidays.”
Suva provides a handy graphic, a flowchart or decision tree, with possible outcomes. There’s a 25 percent chance RIM’s new products do not reach stores for the holidays, in which case, the stock goes to $45. More likely is that the products do make it in time, consumer uptake is strong, and profit margins improve as a result.