Palm: MKM Launches With Neutral Rating; Expects Deals With VZ, AT&T

MKM Partners analyst Pablo Perez-Fernandez today launched coverage of Palm (PALM) with a Neutral rating and an $11 target price, just above yesterday’s close at $10.87.

The MKM analyst writes that he sees risks for the next two quarters from unrealistically high expectations for European launches, and adds that bad news about industry-wide handset pricing could buffet Palm’s share prices in coming months. But he adds that “the Street may be too conservative about the long-term prospects” for the company, and says future launches with Verizon (VZ) and AT&T (T) could move the stock sharply higher.

Perez-Fernandez writes that the outlook for adding more U.S. carriers is the biggest risk for the stock: He thinks they will eventually sell through both Verizon and AT&T, but adds that it is unclear if these deals are done, or how much support those carriers would provide. “This is a major risk,” he writes.

Earlier: Palm: Merrill Repeats Buy Rating, Finds Stock “Compelling”

PALM today is up 86 cents, or 7.8%, to $11.85.