RBC Capital Thinks the webOS Will Save Palm

This morning, RBC Capital raised its rating on Palm stock to outperform, and significantly increased its estimate of what Palm's shares are worth.

A note that accompanied these changes, written by analyst Mike Abramsky, said, in part:

We now believe webOS has raised Palm's chances for Smartphone leadership, through: 1) competitive advantages; 2) multiple devices; 3) global distribution

Palm is developed end-to-end smartphone software and hardware, providing a superior user experience, which we believe can offer a compelling alternative to iPhone. Rather than a one product Hail Mary, we see Web OS as a platform, spawning a family of devices addressing a broader market opportunity.

Abramsky  expects Palm to sell 2.6 million webOS-based phones in the year after the launch of the Palm Pre

The RBC Capital analyst went on to say that it believes Palm shares will reach $12. The company started today at $7.86 but rose to $8.39 at close.

Some Background
Palm is set to release the Palm Pre in the coming months. This will be a smartphone based on a new operating system called the webOS.

Initially, the Pre will be offered in the U.S. by Sprint, and is also expected to be released by wireless carriers in Europe and other parts of the world.

This device will eventually be followed by additional phones based on the webOS.

Via Barron's