Apple stock seen poised to pop after record setting quarter

[AppleInsider]

Wall Street analysts have raised their price targets for Apple stock yet again, after the company posted another recession defying blockbuster quarter with record Mac and iPhone sales.

Apple announced Monday that its fourth-quarter profits surged more than 46 percent to $1.67 billion, as the company sold 3.05 million Macs and 7.4 million iPhones, the most ever in a single frame. In response, analysts are once again bullish on AAPL stock, recommending investors buy as the Mac maker is poised for what is anticipated to be a strong holiday quarter.

As numerous analysts joked, someone forgot to tell Apple about the recession.

Piper Jaffray

Analyst Gene Munster said the September quarter managed to be impressive despite demand for the new iPhone 3GS exceeding supply, and aging Mac desktops still awaiting an update. iPhone sales were slightly lower than his prediction of 7.5 million, but Munster chalked that up to Apple's inability to meet demand for a large portion of the quarter.

"Apple can't build enough phones to meet demand," he said.

The number of Macs moved in the quarter blew away the firm's 2.8 million estimate. Munster continues to believe new Macs will be released during the December quarter, likely iMacs, Mac minis, and/or MacBooks. Desktop Mac sales dipped 16 percent year-over-year during the quarter, something that would be greatly helped by a new iMac debut.

Munster has maintained his overweight rating for AAPL stock and raised his price target to $277.



Needham & Company

Analyst Charlie Wolf singled out the success of the App Store as a key driver for both iPhone and iPod touch sales. The next step he sees Apple taking to further grow the iPhone platform is to eliminate exclusive carrier contracts for the handset.

"We believe it's only a matter of time before Apple discards all of its exclusive distribution markets, which, in turn, would materially increase its addressable market," he said.

In the U.S., Wolf does not expect Apple to make the iPhone available on Verizon's network until at least 2011, when the company's LTE 4G network is expected to debut.

"The incompatibility of the AT&T and Verizon networks argues against a partnership before then," he said. "However, a partnership may never occur if the relationship between Apple and Verizon, which appears at best quite fragile, intervenes."

Needham & Company raised its GAAP 2011 earnings per share estimate from $6.70 to $7.30, and maintained its $235 price target for AAPL stock, along with a strong buy rating.

Oppenheimer

The first quarter of Apple's 2010 fiscal year is "shaping up to be another gargantuan quarter," said analyst Yair Rainer. Even though Apple issued its traditional conservative guidance for the coming frame, investors will know better.

"As usual, Apple appears to be leaving plenty of room for upside surprises to both revenue and margins," Rainer said. "On the revenue side, Apple should benefit from continued Mac momentum (particularly in Europe), higher recognized iPhone revenue, and some channel fill for both Mac and iPhone. Gross margin upside is likely to come from a higher proportion of recognized, high-margin iPhone revenue."

Increasing Mac growth suggests to Rainer that the first signs of "Halo 2.0" are appearing, which is the firm's theory that the iPhone will draw PC users to the Mac platform.

"We believe Halo 2.0 may have been operating below the radar for the past year or more, but that its effect had been subdued by the macro-economy, which likely forestalled purchases of premium computers (like the Mac) more than others," Rainer said. "With the economy beginning to stabilize, consumers may be more willing to move ahead with buying decisions that have been shelved in the face of uncertainty."

Oppenheimer has raised its price target to $235.

RBC Capital Markets

"Recession?" asked analyst Mike Abramsky. "Someone tell Apple."

The company has been able to improve its margins over the past year, this in spite of an average 10 percent lower price on new Macs. Apple has benefitted from improved component efficiencies, lower iPod transition costs and sales of Snow Leopard.

Abramsky said Apple's above-peer margins and cash flow are one of the most important aspects of the company's success, something he expects to continue well into the future. He has reaffirmed an expectation of 33.3 million iPhone sales in the 2010 fiscal year, and another 47.5 million sold in 2011.

"We view the iPhone as a 10-year platform, with significant growth and share gains ahead," he said. "Our outlook reflects continued iPhone share gains in domestic and international markets, driven by distribution expansion, more innovations in devices and user experience, and additional iPhone SKUs."

RBC Capital Markets has upped its price target for AAPL to $275 and reiterated its outperform rating.

Caris & Company

"Guess somebody forgot to tell Apple about the recession," said analyst Robert Cihra. He expects the company's success to continue through the December quarter, with iPhone supply now meeting demand and anticipated MacBook and iMac refreshes "imminent."

Next year, Cihra expects to see Apple's long-rumored tablet device debut in the March quarter, creating a brand new product category for the hardware maker.

Caris & Company has raised its projection for AAPL stock in the coming year to $260.



UBS Investment Research

Analyst Maynard J. Um said he sees Apple's guidance for the December quarter as overly conservative, as Apple is known to do. As a result, he sees "plenty of upside" in the coming frame.

Um said he expects recurring iPhone hardware revenue to grow, thanks to a larger install based and the popularity of the App Store. He expects iPhone sales to grow more than 20 percent in the 2010 fiscal year.

In the future, Um expects to see a service that would provide access to digital content on the go, for use on all Apple devices. "[That] may be the draw (halo) that drives additional future Apple sales," he said.

UBS Investment Research has increased its 12-month price target to $280.

Broadpoint.AmTech

AAPL stock is a "must-own technology bellweather," said analyst Brian Marhsall. He said the stand-out news of the company's earnings report is the $600 average sale price of the iPhone. That's much higher than his firm's own estimate of around $530.

The firm views Apple as "the best technology company on the planet," and one with a number of new products on the horizon that are poised to propel its earnings only higher. Marshall expects sales of the iPhone in China and a forthcoming netbook or tablet launch to be driving factors.

Broadpoint.AmTech has reiterated its buy rating for AAPL and raised its price target to $235.

[teckstud]

I guess the AppleStockInsider still has no word on new Macs today- yet.

[Boogerman2000]

Originally Posted by teckstud

I guess the AppleStockInsider still has no word on new Macs today- yet.

Yup, was thinking the same..

[monstrosity]

Even the Jam is pumping.

[AjitMD]

Why is Verizon scorching the earth in picking a fight with the iPhone in particular? Makes no sense for them to get SJ p-off. Any opinions?

[801]

I was thinking that releasing the next round of less expensive Macs would be an effective competitive move to respond to the pending window 7 release. Maybe a macmini cheaper then just a W7 software upgrade.

[digitalclips]

Originally Posted by AjitMD

Why is Verizon scorching the earth in picking a fight with the iPhone in particular? Makes no sense for them to get SJ p-off. Any opinions?

Just a guess but it makes you think they have certain knowledge that they are not getting iPhone any time soon ... if not, as many have said, it's not exactly the way to win future friends and influence them!

[digitalclips]

RBC's target price is nice .. especially from a bank with strong ties to RIM. Do they know something we don't ...?

[Morky]

Unrelated, but the Apple store is down. "We'll be back shortly...."

[digitalclips]

Originally Posted by Morky

Unrelated, but the Apple store is down. "We'll be back shortly...."

I'd say it is related

[xwiredtva]

We won't see new Mac's until later today. Think 11am-6pm Eastern. Everybody's awake and alert.

Not sure how this is going to be submitted though... Mass commercials tonight on TV?? Hulu??


NEV MIND STORE IS DOWN, REPEAT STORE IS DOWN!

[digitalclips]

Originally Posted by xwiredtva

NEV MIND STORE IS DOWN, REPEAT STORE IS DOWN!

Excitement fills the air ....

[Hattig]

Originally Posted by Morky

Unrelated, but the Apple store is down. "We'll be back shortly...."

Sweetness.

Oh, it's a new iPhone case .. suede

[teckstud]

Originally Posted by AjitMD

Why is Verizon scorching the earth in picking a fight with the iPhone in particular? Makes no sense for them to get SJ p-off. Any opinions?

Verizon has a pretty awesome ad campaign right now with them attacking both AT&T and Apple together and individually. Verizon will only spur the Apple to even greater heights - more than one model of iPhone with increased functionality and more iPhone OS improvements. Competition only helps the consumer. The stockholders probably don't like seeing more money spent on R&D and Advertising -but who cares? The consumer spurs the growth not the stockholder.

[Boogerman2000]

AI????? *echo* ....silence

[teckstud]

Originally Posted by Morky

Unrelated, but the Apple store is down. "We'll be back shortly...."

Originally Posted by digitalclips

I'd say it is related

Originally Posted by xwiredtva

We won't see new Mac's until later today. Think 11am-6pm Eastern. Everybody's awake and alert.

Not sure how this is going to be submitted though... Mass commercials tonight on TV?? Hulu??


NEV MIND STORE IS DOWN, REPEAT STORE IS DOWN!

Originally Posted by digitalclips

Excitement fills the air ....

Originally Posted by Hattig

Sweetness.

Oh, it's a new iPhone case .. suede

Originally Posted by xwiredtva

We won't see new Mac's until later today. Think 11am-6pm Eastern. Everybody's awake and alert.

Not sure how this is going to be submitted though... Mass commercials tonight on TV?? Hulu??


NEV MIND STORE IS DOWN, REPEAT STORE IS DOWN!

Yes- and? It was down Friday and what happened? NADA.
It's just SJ dickin you around.

[xwiredtva]

Originally Posted by Boogerman2000

AI????? *echo* ....silence

Shh... We are all wearing out the refresh buttons.

[xwiredtva]

Originally Posted by teckstud

Yes- and? It was down Friday and what happened? NADA.
It's just SJ dickin you around.

Yea, Steve is manning the web site. Store goes down before new product launches to update sitemaps and marketing.

Hey, how did the tethering go?

[teckstud]

Originally Posted by xwiredtva

Yea, Steve is manning the web site. Store goes down before new product launches to update sitemaps and marketing.

Then why was it down Friday and caused a panic on here?

[xwiredtva]

Originally Posted by teckstud

Then why was it down Friday and caused a panic on here?

I did say that. Store was down for underlying updates. Makes testing on-line marketing and such easier for product launchs.

The store needs to go down to update product numbers in the database. So they put a dead end on the store pages, update the database, test, then update the store. Before you have a major update to your store database you want to update the underlying links and code... So any links pointing towards an older model can be re-directed to the new one. There's a lot to it than pics and buy now buttons.

The MAC side of the site can be updated independently and instantly since they'll keep the same folders, pages, etc.

EDIT: It could be that the new items were added friday, but listed as inactive and now they are making them active... Really depends on how their system is setup and what testing procedures they do.

Down now 20mins.

[teckstud]

Originally Posted by xwiredtva

Yea, Steve is manning the web site. Store goes down before new product launches to update sitemaps and marketing.

Hey, how did the tethering go?

Listen I forgot to - I've been watching playoffs. I'll have to search your posts for that tip. To be honest I rarely use my laptop much now that I own an iPhone but I will try it out- promise.

[teckstud]

Originally Posted by xwiredtva

I did say that. Store was down for underlying updates. Makes testing on-line marketing and such easier for product launchs.

During the day?

[xwiredtva]

Originally Posted by digitalclips

Excitement fills the air ....

Giggity!

[xwiredtva]

Originally Posted by teckstud

During the day?

That was a little odd...

[xwiredtva]

Originally Posted by teckstud

Listen I forgot to - I've been watching playoffs. I'll have to search your posts for that tip. To be honest I rarely use my laptop much now that I own an iPhone but I will try it out- promise.

www.enabletethering.com

Go there ON the iPhone's safari.

[teckstud]

Originally Posted by xwiredtva

www.enabletethering.com

go there on the iphone's safari.

thanks much.

[teckstud]

Originally Posted by xwiredtva

That was a little odd...

Do you think Apple will just post a SJ Quicktime showcasing the new products? No event?

[xwiredtva]

Must be a lot to update. 30mins... Come on guys I have a meeting at 10:30... They are watching me...

[xwiredtva]

Originally Posted by teckstud

Do you think Apple will just post a SJ Quicktime showcasing the new products? No event?

Nah. When they do these they throw commercials out the wazoo, issue PR statements. If it's monumental then there's an event. This is probably just updated internals.

CNBC will break in with a "Breaking news alert" and that'll be it. Then we'll see the new commercials tonight on TV/Hulu/whatever.

I have to goto a meeting here... Product pages are still the same as before. But they update last with the final anyways.

[JupiterOne]

Mr. X who is exceptionally accurate posted this in Future Hardware.

New Product Being Released Today

[teckstud]

Originally Posted by xwiredtva

Nah. When they do these they throw commercials out the wazoo, issue PR statements. If it's monumental then there's an event. This is probably just updated internals.

CNBC will break in with a "Breaking news alert" and that'll be it. Then we'll see the new commercials tonight on TV/Hulu/whatever.

I have to goto a meeting here... Product pages are still the same as before. But they update last with the final anyways.

Correct me if I'm wrong but I don't ever recall a new form iMac being released without an event.
Did the racoon get an event even though it was just an environmental retro-fit?

[Hattig]

Originally Posted by JupiterOne

Mr. X who is exceptionally accurate posted this in Future Hardware.

New Product Being Released Today

MC239LL/A- MAC MINI 2.53/2x2GB/320GB/SD/AP/BT-USA

Sweet fappity ding!

MC408LL/A - MAC MINI 2.53/2x2GB/1TB/NO ODD/AP-BT-USA

Saccharine bamtasm - the server Mac Mini.

MC413LL/A - IMAC 21.5"/3.06/2x2GB/1TB/4670-256MB-USA

Wtf, a 21.5" iMac? That'll be a 1920x1080 display then (Full HD). 3.06? Still Core 2?

[SpamSandwich]

Hee, hee! Finally my insanely unbalanced ("...you own way too much AAPL...") stock portfolio has paid off! Incredible! Whatever they're introducing on the Apple Store, I'll take two! Drinks for everyone! -clink!-

[Wiggin]

Originally Posted by xwiredtva

I did say that. Store was down for underlying updates. Makes testing on-line marketing and such easier for product launchs.

The store needs to go down to update product numbers in the database. So they put a dead end on the store pages, update the database, test, then update the store. Before you have a major update to your store database you want to update the underlying links and code... So any links pointing towards an older model can be re-directed to the new one. There's a lot to it than pics and buy now buttons.

The MAC side of the site can be updated independently and instantly since they'll keep the same folders, pages, etc.

EDIT: It could be that the new items were added friday, but listed as inactive and now they are making them active... Really depends on how their system is setup and what testing procedures they do.

Down now 20mins.

All of which would be, of course, a pretty sad commentary about the infrastructure running the Apple Store. Imagine if Amazon had to shut down every time they updated their databases! And why on Earth would you do it in the middle of the day instead of the middle of the night except to get our attention and stir up hype?

It's all just a publicity stunt to whip us faithful into a frenzy, and not due to any real technical reason.

[teckstud]

Originally Posted by Wiggin

All of which would be, of course, a pretty sad commentary about the infrastructure running the Apple Store. Imagine if Amazon had to shut down every time they updated their databases! And why on Earth would you do it in the middle of the day instead of the middle of the night except to get our attention and stir up hype?

It's all just a plubicity stunt to whip us faithful into a frenzy, and not due to any real technical reason.

Is that why it's called "The Cult of Apple"?

[solipsism]

Originally Posted by Wiggin

All of which would be, of course, a pretty sad commentary about the infrastructure running the Apple Store. Imagine if Amazon had to shut down every time they updated their databases! And why on Earth would you do it in the middle of the day instead of the middle of the night except to get our attention and stir up hype?

It's all just a plubicity stunt to whip us faithful into a frenzy, and not due to any real technical reason.

Even if something has to be restarted or maintained (as they do take the store down at night, sometimes), it has nothing to do with the excessive takedown that usually falls on a Tuesday. This is all clearly to generate free press. There is the occasional product that is absolutely silent and sometimes only noticed days after the change.

[teckstud]

Originally Posted by solipsism

Even if something has to be restarted or maintained (as they do take the store down at night, sometimes), it has nothing to do with the excessive takedown that usually falls on a Tuesday. This is all clearly to generate free press. There is the occasional product that is absolutely silent and sometimes only noticed days after the change.

Funny I don't recall the press taking much notice when the store went down Friday afternoon for over an hour.
But thank you for those words of wisdom.

[aaarrrgggh]

Originally Posted by SpamSandwich

Hee, hee! Finally my insanely unbalanced ("...you own way too much AAPL...") stock portfolio has paid off! Incredible! Whatever they're introducing on the Apple Store, I'll take two! Drinks for everyone! -clink!-

I hear you there! Just after getting AAPL down to about 60% of my portfolio six months ago. Can't ... Stop ... Buying ... More...

Still has to hit $400 for me to retire though...

[Rot'nApple]

Originally Posted by teckstud

I guess the AppleStockInsider still has no word on new Macs today- yet.

Hey at least "AppleStockInsider" didn't use the advice of Jim Cramer who said to buy Apple stock on Tuesday because the low production volume creating iPhone shortages and therefore although they should report near target with what they were expected to sell, the shortages had cost Apple lost sales and lost revenue and therefor the stock would be down Tuesday, a good buying opportunity! - Booyah!

Looks like Cramer needs to add another sound effect button to his sound machine... it goes something like this...

WAAA, WAAA, WAAAAAAAAH! - Booyah indeed!

I wonder what his stats regarding being right, have been?!

https://secure.thestreet.com/AAPSEM/...783&prodid=765

[Dr Millmoss]

I know how much everyone likes to discuss accounting methods, but so far none of the articles I've read on Apple's quarterly report mentions whether they've adopted the new GAAP rules that don't require deferral of iPhone revenues. Makes a HUGE difference in what these numbers mean -- but nobody, including the analysts, are talking about it!