Phillip Huang lowered his price target on RIM to $30 from $41 and cut more than 10 percent off his earnings estimates for both the current fiscal year, ending in early March, and the year after that. He retained a "neutral" call.
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"We still lack conviction RIM can stem its waning momentum on a more sustainable basis in the highly competitive mobile OS market," Huang wrote in a note to clients. "We therefore remain on the sidelines for now."
The BlackBerry maker's stock has been cut in half this year as it missed its own limp quarterly forecasts, suffered delays in bringing advanced smartphones to market and failed to generate excitement when it launched its long-awaited PlayBook tablet.
The Canadian company plans to migrate its BlackBerry smartphones to the QNX software that powers the PlayBook starting early next year. It will release a batch with an upgraded version of the existing software later this year.
While the upcoming phones could help stem some of the negative momentum for RIM, "a more meaningful transition is likely to occur with QNX in 2012 though execution risk is high and success likelihood unclear," Huang wrote.
He added that RIM's strength in mature international markets such as Britain is showing signs of waning and the company is unlikely to get much traction in China.
While RIM mostly competes with Apple and Google's Android software, which is used by multiple handset makers, Huang also pointed out that Microsoft
(Reporting by Alastair Sharp; Editing by Frank McGurty)