Noah Zivitz

Managing Editor, BNN Bloomberg

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A sharp drop in value prompted an analyst to upgrade BlackBerry Ltd. on Monday.

Paul Treiber, who covers the Waterloo, Ont.-based software maker at RBC Capital Markets, raised his rating on the stock to sector perform (the equivalent of a hold) from underperform (the equivalent of a sell), while maintaining his price target of US$7 per share.

Treiber wrote in a report to clients that his decision was based on "the normalization in BlackBerry’s share price back to levels which we believe are more aligned with fundamentals."

BlackBerry's New York-listed shares shed almost 25 per cent of their value this year through the close of trading Friday, and are down 55.7 per cent from their recent high of US$15.88 in June.

Treiber pointed out that the upgrade is based strictly on valuation and that he hasn't changed his view on BlackBerry's fundamentals.

"Overall, we believe that BlackBerry’s [Internet of Things] segment is likely to continue to rebound with the recovery in global auto production. Additionally, BlackBerry’s [average selling price] per vehicle is continuing to expand, as the software content per vehicle is rising," he wrote.

There isn’t a single buy recommendation on BlackBerry among the eight analysts tracked by Bloomberg, who are evenly split between holds and sells. The consensus 12-month price target is US$7.60 per share.