Analysts Downgrade Troubled Palm Amid Severe Revenue Drop

| iObserver

 

Palm this week warned Wall Street that its fourth quarter revenue will be less than US$150 million, in stark contrast to the $306 million expected by analysts surveyed by Thomson Reuters. That news, along with the revelation that Palm sold less than half of the handhelds it shipped to carriers during the third quarter, led many analysts to downgrade the stock and cut their price targets.

According to a Reuters article, Kaufman Bros analyst Shaw Wu wrote in a research note that Palm’s webOS “has some value,” but he is “unsure of the company’s prospects as an ongoing concern.” Canaccord Adams analyst Peter Misek chimed in to say: “We no longer see any value in the company’s common equity.”

Both analysts downgraded the stock to “sell.” They’re among the four tracked by Thomson who have pegged the shares at “sell” or “underperform,” while nine others have a “hold” rating. Reuters also noted that Palm has been rumored to be a potential acquisition target for Microsoft, Nokia, or Dell, but CEO Jon Rubinstein, an ex-Apple executive, downplayed that possibility during a conference call with analysts.

 

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