CIBC Capital Markets maintained an outperformer rating on the shares of BlackBerry (BB, BB.TO), while raising its price target to US$10.00 from US$8.50 on Tuesday, and provided fiscal first-quarter preview for the company.
CIBC noted BlackBerry reports its "typically seasonally low FQ1" on June 25 before the open, with FQ2/F2027 guidance updates.
CIBC expects a "clean print and constructive guide that reinforce improving fundamentals, visibility, and a path to profitable growth" across QNX and Secure Communications.
"For traders and PMs, the setup is catalyst-rich: the debate is shifting from turnaround credibility to backlog growth, conversion, and QNX execution," said CIBC. "A clean Q1 and strong F2027 commentary can sustain momentum into F2027/F2028, with upside to a conservative framework and a path to the high end of guidance."
Management's message at CIBC's Technology & Innovation Conference was stronger, noted CIBC, signaling "better visibility and profitable growth" across both segments.
"Continued execution should move perception toward growth quality, margin expansion, and re-rate potential," added CIBC.
CIBC's F2027 forecast is aligned with BlackBerry's guidance, it said and added that guidance and FactSet forecasts are "below reported trends."
According to CIBC, QNX can deliver double-digit revenue growth of over 12% Y/Y based on a higher backlog, an increase in its pipeline, and that ~50% of revenues are outside the U.S. in Europe, Japan, Korea, and China.
For QNX, CIBC believes the business has a "highly attractive setup" for the rest of 2026, with the "likely possibility of Alloy Kore and GEM wins that could result in a significant increase in backlog".
"We also believe that with defense spending set to increase across the world, SC is now positioned to grow - for the first time in six years - benefiting in each of its three business units," added CIBC. "Finally, as revenue increases it should deliver positive operating leverage and higher EBITDA margins as F2027 progresses. This places BlackBerry in a position to meet, and possibly exceed its conservative guidance."
CIBC raised its price target, based on its F2028 estimates, including QNX at 10x from 8x EV/sales and 42x from 35x EBITDA, it said.
"Bottom line, the stock has a cleaner earnings setup, improving execution proof points, and a dense catalyst path; we view risk/reward as attractive for a continued QNX-led re-rate," added CIBC.
Price: $9.24, Change: $+0.07, Percent Change: +0.76%