NEW YORK (TheStreet) -- Shares of BlackBerry Ltd. (BBRY) are down 3.53% to $10.38 in pre-market trading on Wednesday after the company was downgraded to "underweight" from "equal-weight" at Morgan Stanley.
The firm reiterated its initial $7 price target for the Canadian telecommunication and wireless equipment company.
Morgan Stanley said it lowered BlackBerry's rating because management and the market are likely too optimistic about new product ramps.
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"[BlackBerry] will be unable to gain relevancy in enterprise mobile management software market and will continue to lose enterprise subscribers," said analysts at Morgan Stanley. "Pressure will continue to mount on hardware platforms in the form of both lower pricing and lengthening life cycles, with value creation opportunities primarily in software."
Separately, TheStreet Ratings team rates BLACKBERRY LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLACKBERRY LTD (BBRY) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."