Shares of RIM (RIMM) Tumble on Bearish Analyst Tone

Shares of Research In Motion (Nasdaq: RIMM) are down more than 5% today following two concerning analyst notes issued this morning. The stock most recently traded at $41.98, about 16% above its 52-week low set at $35.05 on March 9.

First, an analyst at JPMorgan assumed coverage of RIM from another analyst, moving the investment rating all the way from Overweight to Underweight. The analyst cited a lack of further earnings power, as well as concerns related to sales volume being able to offset lower prices and growing expenses. Additionally, the analyst pointed out that net additions will likely now be under pressure given drastic declines in employment levels.

Next, an analyst at Kaufman Bros. initiated coverage on Research In Motion with a Hold rating, saying the firm is concerned with profit margin levels. The Kaufman analyst points at the increased level of spending needed to develop their new smartphones.

Despite analyst sentiment which now seems to be turning negative, shares of Research In Motion have actually outperformed the broader markets during this recent bear-market rally. Since the lows set on March 6, RIM has risen by nearly 19%, while the Dow has only risen about 17%.

You May Also Be Interested In