RIM in a Downward Motion After Analyst Bashing

It’s a new week, but another one that’s off to a bad start for Research In Motion, Inc. (NASDAQ:RIMM).

The company hit a new 52-week low on negative news from research analysts. Earlier today, the stock was down 4% to $15.57, after reaching $15.48 for its new yearly low.

Here’s a few of the analysts notes, per the Wall Street Journal.

J.P. Morgan (NYSE:JPM) analyst Rod Hall wrote that RIM has been left behind in the roaring smartphone business:

RIMM  smartphone shipments  have  declined  even  as the  overall smartphone  industry  has  grown strongly.  Based  on  our  proprietary smartphone  work,  we  increased  our  2012  smartphone  shipment  estimate by  7% to  657m  units. However, we  are  leaving  our FY13  (to  Feb  2013) smartphone estimate for RIMM unchanged at 56m units. We forecast that RIMM’s market share declines to 7% by the end of FY13 from its current 11%  level. Only  excellent  execution  on  new  BB  10  devices  has  the potential  to  drive  better  numbers in  our  view. However,  we  need  to  see evidence in order to  feel more constructive.

We  retain our neutral stance as  valuation  remains  inexpensive  against  peers  even  though  we  believe earnings could deteriorate further.

William Blair analysts are drinking similar Kool-Aid:

Our latest round of channel checks across North America indicate that that the lift from OS7-based devices has proved fleeting. We expect Apple and Samsung to gain considerable smartphone market share from RIM (and HTC) in terms of sell-through during the quarter. Bottom line, we believe RIM’s solid sell-in during the November quarter (14.1 million units) combined with weak sell‐through will lead to elevated inventory levels heading into 2012 and further estimate cuts.

With shares trading at 3.4 times our fiscal 2013 EPS estimate of $4.83, sentiment remains depressed, and the stock is at a 52‐week low and well below its peer group. Although the shares appear inexpensive, we believe increasing competition will continue to pressure the company’s share in North America, and international growth is likely to continue decelerating.

Morgan Stanley (NYSE:MS) is looking ahead to Thursday and sees some gloomy news:

We expect weak FQ4 smartphone guidance, based on comments in the pre-announcement that units should be down q/q in FQ4, consistent with our November 22 AlphaWise note where we lowered guidance for FQ4 anticipating weak BB7 sell-through. We expect RIM to guide to 11.7-12.7M smartphones in FQ4, vs. our 12.2M estimate, a 13% q/q decline, well below the Street at 13.1M. We expect EPS guidance of $0.87-1.27 vs. our $1.07 estimate, and vs. the Street at $1.18. We do not expect RIM to provide FY13 guidance.

We believe the situation at RIM continues to deteriorate with the stock supported solely by its book value, and cannot foresee a change without a material change to management tack as, at this point, the migration to QNX/BBX based smartphones sometime in mid-2012, might already be too late. Remain Equal-Weight.

Scotia Capital has kept its “neutral” rating but had a few thoughts about the company’s management:

We maintain our position that the company has all the assets it needs to return to growth in this industry. But, given the scars left on investors from this year we believe new blood would be a welcome addition and a potential catalyst for both the share price and likely company morale. New blood does not necessarily mean a rejection of the current leadership team. The company is still going through a delicate re-positioning and as a result consistency is probably needed. But supplementing the existing team with experienced management from outside the company that can specifically address the company’s execution issues would likely be very welcome by investors.

ThinkEquity thinks it’s almost time for RIM to throw in the towel, but it gives the company a “hold” rating.

We maintain our view that RIMM faces a challenging battle for third place behind the faster-moving ecosystems of Apple (NASDAQ:AAPL) iOS and Google (NASDAQ:GOOG) Android. Our $18 price target is based on a sum-of-parts with RIMM’s IP valued at ~$9.50 per share ($5B), its BES/NOC at $5.75 ($3B) and net cash of ~ $2.75 ($1.5B as reported in pre-announce). We believe RIMM’s assets could prove attractive to AMZN, MSFT or even Apple, all of which we believe could benefit from RIMM’s deep wireless data patent portfolio, carrier and enterprise deployments, and hardware expertise.

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