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BlackBerry Downgraded at Bernstein

Can anyone else tell that BlackBerry (TSX:BB,NASDAQ:BBRY) is set to report earnings next week?  For the first time in our brief history at Fool.ca, we have back-to-back posts on the same company.  Exciting!

Yesterday, it was an RBC upgrade that helped move the stock higher.  Today, it’s a Sanford Bernstein downgrade that has BlackBerry shares trading lower.  Who’s next?

Bernstein has dropped its target for the company’s stock down to $10 from $15.  This estimate was above $20 just a month ago.

The laundry list of items cited for today’s downgrade include:

  • Market expectations have increased significantly.
  • Slow take-up of the new devices reported by distributors and operators in Europe.
  • Google trends data indicating weak search volumes.
  • Weak sell-through market share data.
  • Weak enterprise demand with just 60% of Fortune 500 companies testing the new devices and only 29% of them actually using them.

All of these issues are expected by Bernstein to manifest in the second half of the year.

Foolish Takeaway

Nothing in today’s Bernstein report has anything to do with the long-term value of BlackBerry.  The call is based on how the analyst expects the stock to perform over the next 9-12 months.  Simply, until more time has passed with the new devices in the market, nobody knows what the future truly holds for this company.

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Fool contributor Iain Butler does not own shares of any company mentioned.  The Motley Fool does not own shares of any company mentioned.        

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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