Although investors seem somewhat wary of the clouds surrounding Research In Motion Ltd., the company continues to offer a blindingly sunny outlook, and at least some investment firms believe the best of RIM is still yet to come.
“The bottom line is that RIM’s business remains strong and demand continues to accelerate,” wrote ThinkEquity Partners in a recent investor note. ThinkEquity makes a market in RIM securities. “We are raising our estimates for the November quarter and beyond.”
Such views contrast sharply with those of RIM’s investors, which have sent the company’s stock down more than 20 percent in recent trading. The decline stems from worries over a pending decision regarding RIM’s ongoing patent battle with NTP Inc., as well as concerns about the company’s new 7100 device. During a financial conference Wednesday, RIM executives discounted speculation on higher-than-normal return rates for the new device and reiterated the company’s no-comment position on the NTP patent issue.
For its part, ThinkEquity said the renewed agitation regarding RIM’s patent battle with NTP is premature, predicting that the issue won’t be settled until next year. Further, the firm reiterated its “buy” rating on the company’s stock and raised its target price from $90 to $100 per share. RIM’s stock was trading at around $83 per share, down from its 52-week high of $95 per share.
However, other investment firms appear more cautious. UBS, Legg Mason and Stanford all recently lowered their “buy” rating on the stock.
Despite its stellar revenue and sales performance over the past few years, RIM has suffered ongoing concerns over its patent battle with NTP. The company successfully sued RIM in 2002 for patent infringement, and now the case is sitting before an appeals court.
