A logo stands on display outside the BlackBerry headquarters.
Chris Ratcliffe/Bloomberg
Shares of BlackBerry received a boost on Monday after analysts at RBC Capital Markets upgraded the stock, saying its current valuation made it a more attractive bet.
BlackBerry (ticker: BB) was up 2.2% to $7.19 on Monday. The shares have lost 33% over the last year. That selloff prompted RBC analyst Paul Treiber to upgrade the stock to Sector Perform from Underperform, maintaining a $7 price target. A Sector Perform rating assumes returns will be in line with the sector average over the next 12 months.
“We believe that BlackBerry’s valuation now more appropriately reflects the company’s near-term fundamentals, opportunities, and potential risks,” he wrote in a research note on Monday.
BlackBerry is trading at a significant discount to its enterprise security peers, such as CrowdStrike Holdings ( CRWD
) and Fortinet ( FTNT
), making the current valuation attractive, Treiber said.
The analyst clarified that BlackBerry’s fundamentals haven’t changed, as the company is still working to revamp its long-term strategy. The company’s internet-of-things segment could continue growing as car manufacturing revs back into high gear, he said, and additional marketing spending for the company’s cybersecurity offering could help stabilize revenue from that segment.
The company’s move to sell nearly all its patents related to its mobile devices for $600 million could add an additional influx of cash that strengthens the balance sheet, Treiber added.
Analyst sentiment on the stock has wavered over the last few months. Of the 11 analysts covering BlackBerry polled by FactSet, only one rated it a Buy. Five gave it a Hold, and five rated it at Sell or equivalent.
Write to Sabrina Escobar at [email protected]
