Stock Picks: RIM, Wells Fargo

Plus Wall Street analyst opinions on Autodesk and Salesforce.com

Research in Motion (RIMM)

BMO Capital Markets downgrades to market perform from outperform; cuts price target

BMO Capital Markets on Nov. 18 downgraded Research in Motion Ltd., saying the BlackBerry maker faces rising competition and a consumer shift toward cheaper phones. Analyst Tim Long also reduced his share price target to $64 from $100.

Long is concerned about RIM's reliance on Verizon Wireless, which he said accounts for about 30% of the company's revenue. He said RIM's new BlackBerry Storm 2 is an improvement over the previous model, but lacks some "compelling features that consumers are now looking for" and isn't getting the marketing push from Verizon that rival Motorola Corp. is for its new Droid phone.

Long added that carriers are "flocking" to lower-priced handsets, attracted by the fact that retailers can offer some for as low as $99 with a rebate. He said RIM stands a good chance of competing with cheaper devices, but the lower average sale price could hurt the company's profits.

He cut his earnings estimate for the company's full fiscal year.

Wells Fargo (WFC)

Standard & Poor's Equity Research maintains hold

S&P equity analysts Stuart Plesser and Erik Oja said in a Nov. 18 note that an unconfirmed Bloomberg report stated that the FINRA (successor to NASD), and Wells Fargo Investments LLC have agreed in principle to return approximately $1.3 billion to the firm's clients who have had their funds frozen in the auction rate securities market.

While the analysts called the proposed settlement "expensive", they view it as removing an uncertainty for Wells Fargo. The analysts kept S&P's target price of $33 on the stock, warranted, in their view, as they think 2010 will be the trough year in Wells Fargo's earnings cycle, and with bad-debt chargeoffs peaking in mid-2010.

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