Byron Capital raises target on Research in Motion again

After a long and often tortuous wait for BlackBerry supporters, and holders of RIM stock, Byron Capital analyst Tom Astle says BlackBerry 10 may end up being a more successful product launch than many expected. On January 30th, in New York, Research in Motion will launch its BlackBerry 10 devices.

After a long and often tortuous wait for BlackBerry supporters, and holders of RIM stock, Byron Capital analyst Tom Astle says BlackBerry 10 may end up being a more successful product launch than many expected.

While RIM had another exceptional day today, closing up 10.8% to $17.41 on the TSX, Astle had a handle on the action prior to the open. In a note to clients before the bell today, the Byron analyst raised his target price on RIM to $18, while maintaining his BUY rating.

In today’s update, Astle points out that all feedback from developers suggests that the BlackBerry 10 devices are positive. “Many comment that the product may be too late,” he says, “but we have yet to see any that don’t like the differentiated product.”

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Astle also points out that several previous question marks about the launch have been removed, namely, that carriers seem to be fully behind the launch, that enterprise customers are already on board (a reported 1,600 North American Enterprise customers have already registered to upgrade to BB10) and app support doesn’t appear to be the Achilles Heel many suspected it would be.

Astle says RIM still has some major questions hovering over its head. The company’s service fee decay, he says, is a serious unknown. He also points out that cash flow, which has been a surprise positive of late, should reverse in the February quarter as RIM builds inventory and launches its marketing campaign. Finally, the question of what kind of margins BlackBerry 10 devices might command is up in the air.

Still, he reminds, the current management team, led by CEO Thorsten Heins has been executing exceptionally well during the lead up to the launch. This, says Astle, has left the balance sheet in great shape and the company’s installed base intact. This bodes well for a strongly-executed launch, he says.

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