RIMM: ThinkEquity Says Sell; Sees Price War Ahead
Bold call this morning–no pun intended–from ThinkEquity analyst Mike Burton, who launched coverage of Research In Motion (RIMM) with a Sell rating and a $30 price target.
Burton writes in a research note that he thinks RIMM is a great company, but that its margins are going to get squeezed by increasing competition, and that it needs to invest more to expand. “Some of this has been recognized by the deterioration of the stock,” he writes, “but we believe there is still significant downside to current earnings estimates.”
Burton says the handset sector “has always been brutal where distribution is sometimes as important as the quality of ones product portfolio, but it is also facing a new wave of competition in its core market in QWERTY smartphones.”