BlackBerry Upgraded, As Analyst Says Story Shifts To Software From Hardware

BlackBerry Ltd.'s stock climbed 2.3% toward a 4 1/2-month high in premarket trade Friday, after it was upgraded at Raymond James, which cited an upbeat outlook for the company's software business. Analyst Steven Li raised his rating to outperform, after being at market perform for at least the last three years. He lifted his stock price target to $10.50, which is 30% above current trading levels, from $8. "Stop worrying about hardware--only positives from here on," Li wrote in a note to clients. "We think the narrative shifts to BlackBerry software." He said he likes what he sees in software, with 80% recurring revenue, 15% organic growth and a 30% margin for earnings before interest, taxes, depreciation and amortization. He also sees near-term catalysts in the company's radar offering and the buying back of convertibles. The stock has run up 19% over the past three months through Thursday, but had still lost 15% year to date. In comparison, the S&P 500 has gained 5.9% in three months and 6.9% so far this year.