TORONTO (Reuters) - 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 $22 from $10, 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 shares were up 7.8 percent at $16.20 in afternoon trading on Nasdaq, while it's Toronto-listed shares rose by a similar margin to C$16.62.
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, but is only set to begin launching with major U.S. carriers at the end of this week.
(Reporting by Euan Rocha; Editing by Bob Burgdorfer)