Why BlackBerry Stock Flopped on Friday

Key Points

• An analyst relaunched his tracking of the company.

• His recommendation on its stock wasn't enthusiastic, though.

• 10 stocks we like better than BlackBerry ›

A fairly tepid analyst note helped spur a sell-off of BlackBerry (NYSE: BB) stock on Friday. The company, still working to pivot from its salad days as a pre-smartphone communications device powerhouse, saw its share price erode by more than 5% as a result. That compared unfavorably to the performance of the S&P 500 (SNPINDEX: ^GSPC), which flatlined on the day.

Good but accurately priced now

That prognosticator was Daniel Chan of TD Cowen, who after market close on Thursday resumed his coverage of BlackBerry stock. Unfortunately for the tech company and its investors, he did so with only a neutral recommendation, setting a price target of $5 per share.

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Image source: Getty Images.

According to reports, in his latest take, Chan praised BlackBerry's most recent efforts to pivot further away from its smart device past. He feels that it has the potential to grow its business and widen its profit margins.

The analyst has more of an issue with the recent run-up in the stock's price. Pointing out that it has climbed a precipitous 61% in value since last December, he now feels it's fairly valued by the market.

Mixed fortunes

These days, BlackBerry focuses on several key activities -- assisted driving solutions for next-generation vehicles, Internet of Things, and cybersecurity. It also derives some revenue from licensing technology it has developed. The fortunes of these businesses are mixed, as is the company's performance -- it has seen revenue dips of late, and hasn't always posted a net profit.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry. The Motley Fool has a disclosure policy.