Palm Pre Prompts Another Stock Upgrade

Deutsche Bank puts a buy rating on Palm stock and raises the price target to $10 from $6.
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Updated from 9:50 a.m. EST

Palm's

(PALM)

revival party continued Monday with an upgrade from Deutsche Bank that bumped the stock price up 5%.

Citing big interest among phone companies eager to offer a hot phone to rival

Apple's

(AAPL) - Get Report

iPhone, Deutsche Bank put a buy rating on the stock and raised the price target to $10 from $6. Deutsche Bank is only the most recent firm to jump on the Pre

bandwagon

. Earlier this month, Credit Suisse put an $11 price target on the stock, predicting the phone will further juice the stock price.

The excitement over Palm's upcoming Pre touchscreen has helped lift the stock over 150% so far this year as investors view the critic-pleasing smartphone as the key to the company's turnaround.

Palm stock, which got a 5% lift in early trading Monday, was recently up 3.3% to $7.82.

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"Palm has been beaten down for so long that even a modest success could generate significant earnings leverage," Deutsche Bank said. "Numbers in the next two quarters will still be dismal, but the Pre offers a meaningful break with the past."

No. 3 wireless telco

Sprint

(S) - Get Report

has an exclusive agreement with Palm to offer the Pre first starting sometime this year. Presumably, once that agreement expires,

Verizon

(VZ) - Get Report

and

AT&T

(T) - Get Report

will have a shot at carrying the phone and boosting the potential sales.

Early reviews of the Pre have been favorable. Critics like its slide-out keypad, 3 megapixel camera and quickness. Some grumbled about its chunky girth and lack of a memory card slot.

The screen also uses a multi-touch technology that has set off a fiery debate in the blogsphere about whether or not it infringes on Apple's touchscreen technology. So far, however, Apple has not filed any court cases to defend the multi-touch patent.

But not all analysts have been as optimistic about Pre's chances of lifting Palm out of its dive. RBC analyst Mike Abramsky cautioned that Palm has

a number of challenges

in its path to recovery and that putting all hope on one phone may be risky. The Pre still hasn't been delivered, and numerous production flaws and telco approval snags could thwart a timely arrival.

There's also a tough field of rival phones to contend with. Apple is expected to introduce at least one new version of the iPhone this summer. And meanwhile, BlackBerry maker

Research In Motion

(RIMM)

has a hot hand going with its Storm and Bold models.