MKM Partners’s Michael Genovese today reiterates a Neutral rating on shares of Research in Motion (RIMM) and a $15 “fair value estimate,” but lowers his estimates for last quarter and this year, following some “disappointing U.S. retail store checks” he’s conducted with respect to the BlackBerry, especially at Verizon Communications (VZ).
Genovese cut his estimate for the fiscal Q4 that ended last month to $4.3 billion and 80 cents a share, from a prior $4.75 billion and 90 cents. He cut his 2013 fiscal year estimate to $16.57 billion and $2.92 from a prior $17.66 billion and $3.62.
Analysts are on average modeling $4.56 billion and 83 cents for last quarter, and $17.55 billion and $2.85 for this year.
Genovese recounts disheartening feedback he heard from U.S. retail reps:
We were surprised when more than one Verizon retail sales associate told us that they actively advise customers against purchasing Blackberry. They told us that warranty returns on BB7 products are well over 10% and possibly as high as 20% with many devices (both new and refurbished models) bricking right out of the box. At the non-Verizon stores, several sales associates told us that today�s Blackberry buyer is overwhelming already a user and very few new smartphone buyers choose RIMM.
He notes, too, defections by government buyers, such as the U.S. General Services Administration, which is approving use of Apple’s (AAPL) iPhone and phones running Google’s (GOOG) Android operating system.
Genovese thinks the stock could “trade down toward $10″ this year, but says his $15 target is already fairly “conservative.”
RIM shares today are up 28 cents, or 2%, at $13.43.
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