BlackBerry Shares Slide 2.5% Premarket As Goldman Resumes Coverage With a Sell Ratiing

By Ciara Linnane Markets MarketWatch Pulse

BlackBerry Ltd. stock slid 2.5% in premarket trade Monday, after Goldman Sachs resumed coverage of stock with a sell rating and 10% downside to its $8.50 price target. The stock is trading at a better multiple thanks to an improved balance sheet, the transition from hardware to software and optionality around ADAS (advanced driver assisted systems) software, analyst Gabriela Borges wrote in a note. "However, with the auto business trading at an implied 13-17X revenue, and unlikely to ramp meaningfully until 2019, we think fundamentals will be the primary driver of the stock over the next 12 months," she wrote. "On this point, we see risk to 2HFY18 and FY19 estimates given the Street modeling a sharp inflection, and increasing competition in EMM (enterprise mobility management." Shares have gained 37% in 2017, while the S&P 500 has gained 10.6%.

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