Cowen Analyst Up Price Target On BlackBerry Ltd (NASDAQ:BBRY)

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) price target has been raised to $10 from $9 by Cowen Group analyst in a report issued on Tuesday. The sell-side firm assigned Market Perform rating on the stock.

Software focus, but hardware to dominate

Cowen analyst Bryan Prohm praised the Canadian company’s effort to revive the software service. The analyst noted that compared to the hardware, efforts to revive its portfolio during 2014 have probably made BB10 smartphones safer for large mobile operators “to support in C2015 (e.g. AT&T), w/Classic potentially providing the company with an opportunity to catalyze a meaningful upgrade cycle among 9900 Bold users and slow erosion of its installed base.”

Prohm said that even though the software segment of the company is the core segment now, it’s hardware segment will continue to contribute maximum until mid-2016. Hardware revenue are expected to exceed 60% of the total proceeds in 2016. Cowen analyst notes that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) will probably take one more year to affirm $500 million software based annual revenue guidance by investors.

Cowen analyst noted various other factors that could affect the company’s performance in fiscal year 2016 such as replacing Z3 with a new product along with the transition towards demand for Classic in comparison to 9900 Bold installed base.

Signs of recovery

Short interest in BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) dropped below 100 million shares for the first time since last November and the short position on the stock as on January 30th was 97,681,923, down from 125,367,832 two weeks earlier. The decline in the short interest suggest that most of investors are buying BlackBerry expecting the company to recover in future.

According to Cormark analyst Richard Tse, who has assigned Buy rating to the stock, this year will turn out to be a strong year for BlackBerry as it transition from the consumer segment gradually.

“We believe a shift toward enterprise presents a meaningful opportunity. The big risk is execution; however, we believe the potential reward outweighs that risk right now,” noted Tse.

Total 36 analysts have set their verdict on BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), and five of them have assigned Buy with 21 assigning it a Hold rating. The 12-month average target price assigned to the stock is $9.44.