Bullish Bias Heading into RIMM’s Earnings

Over the past two months or so, analysts have rolled out a series of positive commentaries on the prospects for Research In Motion (RIMM) and its upcoming earnings announcement (March 31). The table below shows the wide range of upgrades and bullish price targets from various analysts. In addition, at least four analysts have issued positive outlooks and/or raised estimates ahead of RIMM’s earnings: Oppenheimer, MKM Partners, Morgan Stanley, and RBC. Kaufman raised estimates although it removed RIMM from its focus list. I only found one analyst who has issued a “warning” ahead of earnings: Rodman & Renshaw recently stated that buying RIMM in the mid-$60s offers a better risk/reward. All data from briefing.com:


Analysts are bullish on RIMM ahead of earnings
Analysts are bullish on RIMM ahead of earnings


The technicals on RIMM look relatively bullish with the $72 resistance line I have referred to in previous posts now serving as support. A close of the September gap-down remains the short-term target for this move.


RIMM support holds as technicals remain bullish
RIMM support holds as technicals remain bullish

*Chart created using TeleChart:

I have already closed out earlier bullish positions and recently switched to a bullish call spread that expires in June to accommodate the risk of an adverse reaction to earnings tomorrow. I have no specific expectations for earnings (I wish analysts were not so bullishly biased!), but I will be adjusting my position based on the post-earnings reaction.

Be careful out there!

Full disclosure: long RIMM (call spread)

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