BlackBerry’s (BlackBerry Stock Quote, Chart, News: TSX:BB, Nasdaq:BBRY) turnaround effort has been an uphill battle, but CEO John Chen’s execution is making the company’s brand meaningful again, especially in enterprise, says Cormark analyst Richard Tse.
In a research update to clients today with the header “The Comeback Kid”, Tse said he is “getting back onboard” as a BlackBerry bull. The analyst raised his rating on the stock from “Market Perform” to “Buy” and increased his one-year target on the stock from (US) $11.50 to $17.00.
Tse attended BlackBerry’s recent BES12 Release Event in San Francisco and says he came away with the impression that the scale of changes implemented by CEO John Chen are “more pervasive” than he had originally thought.
“…we now believe there’s developing going-concern thesis based on a credible road map and momentum for BES12,” said Tse. “Obviously, that will not happen overnight but as far as the stock is concerned, we believe the market is looking to price in a 2-3 year outlook on the name”.
The analyst says BlackBerry’s “new” subscription-based revenue model has the potential to drive revenue in a way that is greater than one employing traditional system access fees. He says he doesn’t think a scenario in which the company generates $1.15 in EPS by generating $7 from 35-million subscribers is “out there”.
Shares of BlackBerry on the Nasdaq closed today down 7.1% to $11.20.
BlackBerry will release its new BlackBerry “Classic” phone on December 17th in Manhattan, Frankfurt and Singapore.
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