While an analyst at Merril Lynch is bullish on Palm's chances, that's not a universal opinion. On Friday, Morgan Joseph downgraded PALM from BUY to HOLD. According to a story appearing at StreetInsider.com, an unnamed Morgan Joseph analyst said:
We believe that, while Palm's share price could continue to benefit from upward momentum, the shares are fully valued and the risk-reward ratio is not attractive at this level. Should shares of Palm pull back to a level where the risk vs. reward scenario is once again attractive, we would revisit the valuation and our rating...We are maintaining our CY09 sales and non-GAAP EPS estimates of $612mm and a loss of $1.71, respectively. For CY10, we are also maintaining our estimates of $787mm and a loss of $0.97, respectively."
Morgan Joseph initiated coverage of Palm in September 2008, and upgraded it to BUY from HOLD on January 9, 2009. The move on Friday was attributed to Palm’s shares virtual achievement of Morgan Joseph’s $10.00 price target. Palm closed Friday at $9.84 (down 0.06).
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