Palm dealt another blow by an analyst - stock drops under $9

It only seemed like yesterday when Palm unveiled to the world it's Palm Pre handset that featured a refreshing new platform call webOS. In the course of over a year, we've seen their handset launched with much anticipation and hope riding on its back – but during the same period, we've seen Apple strike back so quick with the iPhone 3GS and then came the wave after wave of top notch Android handsets. Lost in all of it, almost losing some of its luster during the process, Palm is still trying to move forward as it faces an insurmountable mix of opponents that seemingly have set the bar. The latest blow to Palm comes in the form of a Bank of America/Merril Lynch analyst, Vivek Arya, cutting his rating on Palm to Underperform from Buy – slashing his target price of $20 to all the way down to $10. He states in a research note that “Palm’s superior platform features have not translated into sufficient carrier support and consumer demand, and we are concerned the window of opportunity may be closing as Google’s Android ecosystem gains ground, Research In Motion revitalizes its portfolio, iPhone increases its presence, and as Microsoft reboots its efforts with Windows Phone 7.” Looking toward Q4 already, Arya expects Palm's potential for sales growth to dramatically decrease, by as much as 20 percent, when Microsoft plans to launch their latest Windows Phone 7 Series platform. Just 6 months ago Palm was looking to make a serious rebound with their stock performing at a 2 year high of $17.46 – now it has dropped to less than $9 today after Arya's stance on the company. When you look even further into the numbers, Palm has not seen a profit in more than 8 quarters.

source: Barron's via wmpoweruser