UPDATE: Morgan Stanley Downgrades BlackBerry As Market Has Swung Too Optimistic

In a report published Wednesday, Morgan Stanley analyst James E. Faucette downgraded the rating on

from Equal-Weight to Underweight, but named a $7.00 price target. In the report, Morgan Stanley noted, “We believe that the market has largely valued the company based on the assumption that BlackBerry will generate an incremental $250mm in software revenue and an incremental $100mm in messaging revenue during FY16,consistent with the targets set out by BBRY CEO John Chen (from roughly $0 today). We estimate this implies that BBRY will not only successfully retain roughly its entire existing enterprise subscriber base—plus more—it will also convince that subscriber base to increase ~3x how much it is paying BBRY today.” BlackBerry closed on Tuesday at $10.76.