What's really up with Palm Pre volumes?

Some analysts do a better job of making headlines than others. And, as we all know, headlines generate trade flows, which makes the cash register ring at a brokerage firm. Today’s instalment: Canaccord’s Peter Misek versus Barron’s Eric Savtiz. Hmmmm. Who will come out the winner?

Palm: Sales Well Short Of Targets At Verizon, Canaccord Says
By Eric Savitz

Sales of Palm (PALM) smart phones at Verizon Wireless (VZ, VOD) are coming in well short of targets, according to Canaccord Adams analyst Peter Misek.

Misek told his firm sales force this afternoon – and then told me – that he thinks sales of the Pre Plus and Pixi Plus so far are less than 50% of Palm’s target levels. He believes Verizon will have to reassess its approach. Misek notes that there are multiple options: the carrier could ratchet up marketing (likely together with Palm); it could re-train store sales reps to push the phones; it could change its marketing approach; or it could simply throw in the towel and stop selling Palm phones entirely.

(I’d note that, somewhat to Misek’s irritation, the part of his message that leaked into the market was the possibility of Verizon dropping Palm; while he says it is a possibility, it is not the only possibility.)

Misek notes that Palm has not given any hard guidance on how many phones it expected to sell through Verizon, so getting a precise handle on the situation isn’t easy; that said, he’s certain that sales are falling well below expectations.

Meanwhile, Misek isn’t holding out much hope for an acquisition of the company; if Palm is having trouble selling the phones, the company’s allure is considerably diminished.

Misek maintains his Sell rating; the stock has dropped below his $8.50 price target, and he says he is now re-evaluating, as he looks for clues on the February quarter, which ends in a few days.

PALM today fell 11 cents, to $8.09; the stock is down another penny after hours.

MRM