Shares of BlackBerry rose more than 7 percent on Wednesday after Morgan Stanley upgraded the stock and doubled its price target for shares of the smartphone maker, as it sees the company's new BlackBerry 10 devices boosting margins.
The brokerage firm did a double upgrade on BlackBerry's stock, bumping it to "over weight" from "under weight," saying that it now believes the firm's handset unit can support itself moving forward and will no longer have to rely on its services arm to support it.
Morgan Stanley analyst Ehud Gelblum, who raised his price target on the company to $US22 from $US10, said he still believes that BlackBerry will remain a niche player, mostly selling to its existing base of Blackberry users.
"However, in contrast to our prior thinking, we now believe there may be room in the handset market for niche midrange players." said Gelblum in a note to clients.
BlackBerry is expected to report its fiscal fourth-quarter results on March 28, giving investors a glimpse of the kind of traction its new Z10 touchscreen device is generating.
The device is currently on sale in over 20 countries.
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