S&P Downgrades Palm on its Competitive Outlook

Posted By: Ryan Kairer on Wednesday, May 28, 2008 10:00:29 AM

Palm Stock Standard & Poor's is the latest Wall St firm to put out another pessimistic outlook on Palm's near term financial prospects. S&P analyst Todd Rosenbluth has just changed his rating on Palm from Hold to Sell citing Palm's current competitive situation and the larger economic climate.

Todd stated "We believe PALM is more exposed than peers to any fluctuations in its business or the economy, which has proved problematic given PALM's weak Q2 and Q3 FY 08 (May) results. Even with recent handset model launch, we believe PALM's ability to gain market share in the high-growth smartphone market will be limited by new offerings from competitors."

The research note goes on to say "We (S&P) think new management will provide improvements, we expect a turnaround to take time. We trim our price/sales-based 12-month target price by $0.50 to $5.50."

At the time of publication, Palm's share price was trading at 5.83, down 0.04 (-0.68%) on the day.

(via Tech Trader Daily)

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Article Comments
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Correction

SeldomVisitor @ 5/27/2008 4:08:48 PM #

"from Hold to Sell"

or maybe

"to Sell from Hold".

RE: Correction

Ryan @ 5/27/2008 5:06:58 PM #

I'm working off the notes at Barron's since I don't have access to the report at the moment and that's what they have there.

RE: Correction

SeldomVisitor @ 5/27/2008 5:20:06 PM #

== "Standard & Poor's analyst Todd Rosenbluth this morning cut his
== rating on Palm (PALM) to Sell from Hold..."

- http://blogs.barrons.com/techtraderdaily/2008/05/27/palm-sp-downgrades-to-sell/?mod=yahoobarrons

RE: Correction

jeffhoward001 @ 5/27/2008 5:35:49 PM #

Is Sell -> Hold considered a downgrade?

Tungsten T -> Palm TX -> TX & Centro (Good combo so far!)

RE: Correction

SeldomVisitor @ 5/27/2008 5:36:50 PM #

> Is Sell -> Hold considered a downgrade?

No.

RE: Correction

Ryan @ 5/27/2008 6:06:20 PM #

I've changed my headline, still trying to get the original note.

RE: Correction

SeldomVisitor @ 5/27/2008 7:24:16 PM #

Rather than keeping a "possibly" incorrect (180 degree incorrect) article up, journalistic ethics would suggest just unlinking it from your site until you have "found the original note" to back up what you want the article to say.

========

I use the word "possibly" only to be nice.

RE: Correction

Ryan @ 5/28/2008 1:14:38 PM #

Got the report this morning and have reposted an updated article. The rating was indeed changed from Hold -> Sell.

Good for Palm

GF_PalmInfo @ 5/28/2008 1:37:58 PM #

Good. After the downgrade, Palm shares price went up 4%. The ANALysts claimed that they are following the smartphone market and Palm for a long period of time before they made the recommendation. I really doubt about their credibility. They don't even own a single shares of Palm. I am not saying Palm is a good company. We all know about the poor execution of the company in the last two years. BUT I think the current share price is reflected the problems.

If Palm is really that bad, why the institutional investors keep increasing their position. (http://tinyurl.com/69auyw) Unlike the ANALysts, these people put the real money in the stock market. I believe their internal analysts are better.

RE: Good for Palm

SeldomVisitor @ 5/28/2008 1:42:25 PM #

> ...I am not saying Palm is a good company. We all know about the
> poor execution of the company in the last two years...

- http://www.thestreet.com/_yahoo/university/financeprofessor/10418463.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

> ...If Palm is really that bad, why the institutional investors keep
> increasing their position...

They didn't:

- http://www.nasdaq.com/asp/holdings.asp?symbol=palm&&FormType=Institutional&page=holdings&selected=PALM

RE: Good for Palm

SeldomVisitor @ 5/28/2008 1:44:59 PM #

Apologies - the double ampersand ruined the second link. Here it is again:

- http://www.nasdaq.com/asp/holdings.asp?symbol=palm&FormType=Institutional&page=holdings&selected=PALM

RE: Good for Palm

GF_PalmInfo @ 5/28/2008 1:57:10 PM #

Oh... 103.90% of the total holdings mean bad for Palm..... Then I should wait until it reaches 200%.

RE: Good for Palm

SeldomVisitor @ 5/28/2008 2:01:20 PM #

You are paying attention to the wrong number - see "declining" compared to "increasing".

Palm Software on sale