Banc of America downgraded Research In Motion (RIMM) to neutral from buy.
Analyst Tim Long says he believes RIMM will show sales, margin, and EPS upside when it reports on Jun. 29, driven by continued strength in BlackBerry device sales. However, he believes this strength is understood and the stock is embedding more EPS upside. At current valuation, he believes investors may begin to focus on some of the risks, including competition, litigation impact, and payment of taxes.
Long says he's not concerned about these issues individually, but at the current multiple he recognizes the stock risks. He keeps the $118 target price.