Palm Stock Maintains Pre Hype Boost
Two new analyst reports on Palm's stock have been published this week and they couldn't be more different. First the good news, Deutsche Bank has upgraded the stock to Buy and raised their target price to $10, stating:
"We see clear signs that [Palm is] capable of executing to plan and shipping the Pre at least on time," At the recent Mobile World Congress in Barcelona, he adds, "we found a lot of carrier interest in the device as well." [...] "Palm has been beaten down for so long that even a modest success could generate significant earnings leverage. Numbers in the next two quarters will still be dismal, but the Pre offers a meaningful break with the past."
The positive excitement over the Palm Pre has pushed the stock up over 150% percent since its unveiling at CES. As of today, the share price stands at around ~7.50, which of course is impressive given its 1.14 - 9.51 52-week range.
Despite the above not all analysts are aboard the Pre hype train. Canaccord Adams analyst Peter Misek maintains a sell rating on the stock with a target price of $0. Misek claims the Pre is not a "game changer" and that the initial exclusivity period with Sprint will "will likely dampen Palm's prospects in the U.S."
Mr. Misek also goes on to reason that Palm would need to sell 4.5 million smartphones in FY 2010 "to justify any meaningful return to current share prices." He also writes, "Although the share price has moved against us recently on higher Pre and WebOS hype than we anticipated, we believe the sheet will face as economic realities set in."