• Merrill Lynch analyst Vivek Arya this morning upped his rating on Palm to Buy from Hold, while lifting his price target to $14, from $8.70. Arya said the Street “underestimates Sprint’s commitment to Palm’s success and [the] strength of the [the] underlying smartphone market.” He thinks Palm could ship up to 2.5 million Pre smartphones in the 2009 second half; for 2010, he thinks the company could ship as many as 6.2 million phones. (TTD)
  • As he should, Arya cautions that there is “a binary element” to his call, admitting the company is “critically exposed” to the success of the Pre. The company currently has a weak balance sheet with $323 million in cash, $395 million in debt, and a $90 million burn rate in the latest quarter. Smells like Pre fever to me. I’m not touching this stock.