Sector Snap: Most handset stocks decline, but RIM gains

NEW YORK—Handset stocks mostly fell Friday, although Research In Motion Ltd. advanced after an analyst increased his estimates and price target for the BlackBerry maker.

Shares of Canada-based RIM rose $3.20, or 2.5 percent, to $131.20 in afternoon trading. The stock has traded between $43.98 and $137.01 in the past year.

In a client note, Canaccord Adams analyst Peter Misek lifted his fiscal 2010 estimates and raised his price target to $190 from $180, citing new devices and an impending upgrade cycle.

"With the 8700 (handset) approaching two years of service, we believe RIM's upgrade cycle will remain healthy in the coming quarters," he said.

The analyst thinks the company will launch its first device that works with 3G, or third-generation, networks sometime in its fiscal second quarter, which ends in August.

That, plus the launch of additional products within 12 months "could reaccelerate RIM's growth in the back half of the year, just as the Pearl and Curve have done in fiscal 2007 and fiscal 2008, respectively," he said.

Meanwhile, shares of Treo maker Palm Inc. fell 21 cents, or 3.5 percent, to $5.76.

Elsewhere in the sector, American Depositary Shares of Nokia Corp. fell 91 cents, or 3 percent, to $29.57.

In a client note, RBC Capital Markets analyst Mark Sue reiterated his "Outperform" rating and $40 price target for the stock. Sue said that the leading handset maker "may see strong unit growth this year and value growth as well, considering its dominant market position and the improving product portfolio in the second half."

He said that in the near term Nokia could give up some share of the Western European smart phone market to RIM and iPhone maker Apple Inc., but could also gain some ground in other areas in the near term.

Apple shares fell 54 cents to $179.46 and shares of Motorola Inc. fell 10 cents to $9.97.