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UBS cuts Apple price target to $95 from $100

post #1 of 26
Thread Starter 
Analysts for UBS Investment Research on Tuesday cut their price target on shares of Apple Computer to $95 from $100, but maintained a "Buy" rating on the stock.

"We believe that Apple's shares reflect second quarter results slightly below consensus with cautious guidance," analyst Ben Reitzes wrote in a research note to clients. "Weak iPod unit sales [of 9 million units or lower] may be expected."

However, the analyst still believes the company's guidance of $4.3 billion in sales and 38 cents in earnings-per-share (EPS) will turn out to be conservative given strength in its other music" sales. "We believe second quarter EPS over 40 cents could be considered a positive given the recent plunge in shares," he wrote.

Citing his own checks, Reitzes estimates sales of 9.6 million iPods last quarter with a Mac unit shipment declining 9 percent year-over-year to 979,000 units. "We believe the 'Other Music' segment was solid with 9 percent revenue growth [since last quarter] helped by accessories and growth in iTunes," he said.

Given seasonality and the the Intel Mac transition, Reitzes, like other analysts, expects Apple to issue conservative guidance for its third (current) fiscal quarter of 2006. He believes this outlook may be conservative given a few new Macs slated for the quarter.

"Based on slightly lower estimates, our target adjusts to $95 from $100, still based on an EV/sales multiple of 3x our 2007 fiscal year estimate, higher than Apples 'pre-bubble' multiple and its peers due to faster growth and higher margins," the analyst wrote.

Also on Tuesday, Lehman cut its own price target on Apple to $73 from $80.
post #2 of 26
IMHO, Apple reached its peak until Leopard/full Intel line. I really doubt anything new is going to propel the stock to new levels.
post #3 of 26
Well there is your proof. Apple is doomed yet again. Time to leave the ship.
"I reject your reality and substitute it with my own" - President Bush
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"I reject your reality and substitute it with my own" - President Bush
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post #4 of 26
Quote:
Originally posted by Anders
Well there is your proof. Apple is doomed yet again. Time to leave the ship.

I hope your joking a $5 drop in evaluated share price is nothing to scream home about
post #5 of 26
Quote:
Originally posted by crampy20
I hope your joking a $5 drop in evaluated share price is nothing to scream home about

General rule of thumb: Anytime the words "Apple" and "doomed" are present in the same sentence, it is to be read with sarcasam on this site.
Hard-Core.
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Hard-Core.
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post #6 of 26
Quote:
Originally posted by aplnub
General rule of thumb: Anytime the words "Apple" and "doomed" are present in the same sentence, it is to be read with sarcasam on this site.

Extreme sarcasm if the other words "OMG" and "teh" are also included.

Hence,

OMG Apple is teh DOOMED

Should be read as the complete opposite.

post #7 of 26
Quote:
Originally posted by ipodandimac
IMHO, Apple reached its peak until Leopard/full Intel line. I really doubt anything new is going to propel the stock to new levels.

IIRC, the price target is for next year about this time, so by then, we should have Leopard and a full Intel line, at least for the non-server.

Also, about that time, that other company that starts with an "A" should be releasing its updated product, so people can quit $@#$%* grouching about it by then.
post #8 of 26
Apple is a wild ride, and I actually am very happy with all the attention the stock has gotten because it's fun to speculate on the stock of a company you love.
I actually sold much too early though because I was afraid the stock might not do as well, thereby causing me to mistake my dissapointment for not loving Apple anymore, haha.
I don't feel that way anymore. I think the management at Apple is fantastic and I am glad that I rediscovered Apple two years ago. I really feel as though I know a great deal now about what to expect from Apple, even when to perhaps expect the unexpected.
So when they do this all again in 8 years or so, I will be back...
post #9 of 26
Apple will announce financial results on April 19, 2006 at 2:00PM PT.


Buy now folks.


8)
post #10 of 26
Quote:
Originally posted by TednDi
Apple will announce financial results on April 19, 2006 at 2:00PM PT.


Buy now folks.


8)

Maybe not. It's Apple's low quidance that is causing these problems. The assumption is that Apple will, again, offer lower quidance than hoped for.

I held on to my stock, and even bought more at 73. I'm wondering if I should sell a batch, and keep it out for a while. If the quidance is lower than expected, it could go down some more.
post #11 of 26
Quote:
Originally posted by TednDi
Apple will announce financial results on April 19, 2006 at 2:00PM PT.


Buy now folks.


8)

The dozen or so times I've watched Apple earnings announcements, just every time, the stock immediately afterwards. This is after good news and beating even the most optimistic analyst expectations and significant actual growth and market share increases. So really, if there aren't major commissions to be worried about, I'd sell now and buy after the announcements.
post #12 of 26
IMO, if your bullish on Apple, why not look at intel? They are now one of Apple's biggest suppliers and are quite cheap based on P/E. If Apple does well well it should rub off on intel. In addition I think that the delay of vista really plays to intel's advantage. When vista is released it will probably spur pc sales, regardless of what we think of vista as an os. By the time that occurs intel shoud have their big guns in their core lineup rtm. I think they will compare nicely to amd's offerings and will sell well. I've been buying intel here under 20. My 2 cents.
post #13 of 26
Quote:
Originally posted by backtomac
IMO, if your bullish on Apple, why not look at intel? They are now one of Apple's biggest suppliers and are quite cheap based on P/E. If Apple does well well it should rub off on intel. In addition I think that the delay of vista really plays to intel's advantage. When vista is released it will probably spur pc sales, regardless of what we think of vista as an os. By the time that occurs intel shoud have their big guns in their core lineup rtm. I think they will compare nicely to amd's offerings and will sell well. I've been buying intel here under 20. My 2 cents.

Intel has not been a recommended stock.
post #14 of 26
Quote:
Originally posted by melgross
Intel has not been a recommended stock.

Depends on who you listen to. Argus has a buy on the stock. Jim Cramer is bullish on the stock, although in all fairness he has been bullish for some time while the stock has tanked. How can you be that optimistic about Apple and not Intel? Apple is a pure intel house just like Dell. Although volume is smaller, Apple is buying Intels higher lines of chips where I'm sure Intel has greater margins. Look, both could go nowhere. Different opinions are what make markets. I doubt many people had buy ratings on Apple at $4.0 but that was the bottom and buyers have been richly rewarded.
post #15 of 26
Quote:
Originally posted by backtomac
Depends on who you listen to. Argus has a buy on the stock. Jim Cramer is bullish on the stock, although in all fairness he has been bullish for some time while the stock has tanked. How can you be that optimistic about Apple and not Intel? Apple is a pure intel house just like Dell. Although volume is smaller, Apple is buying Intels higher lines of chips where I'm sure Intel has greater margins. Look, both could go nowhere. Different opinions are what make markets. I doubt many people had buy ratings on Apple at $4.0 but that was the bottom and buyers have been richly rewarded.

Because, despite Apple's recent lack of new product, Apple is a growth company. Even if their years sales are less that previously thought, from about $20 billion down to the newer estimates of $18 billion, that's still a $4 billion rise from $14 billion. A pretty good jump.

Intel's sales have been lackluster. AMD has made big gains, and is likely to continue doing so for the next 9 to 12 months, though after that, it's anyones guess.

Apple's moving to Intel, will drag Apple down this year from what had been expected, but from the stock price now, it has good upside.

The announcement of the Windows enabling software alone has given the stock a good boost.

There is little boost to Intel from Apple, this year. Though if Apple's sales rise dramatically next year, the situation could be different. But, no matter what happens there, Apple will still be a small percentage of Intel's total sales.
post #16 of 26
Quote:
Originally posted by melgross
Intel's sales have been lackluster. AMD has made big gains, and is likely to continue doing so for the next 9 to 12 months, though after that, it's anyones guess.


You don't think Intel's core line-up compares favorably to AMD's chips?
post #17 of 26
Quote:
Originally posted by backtomac
You don't think Intel's core line-up compares favorably to AMD's chips?

At this time, the only chips Intel has that are considered to be better than AMD's are the Core technology chips, as represented by the Yonah's. The rest of Intel's line-up is considered to be creaky, at best.

They have just introduced the last of the Pentium 4 line of chips, which is a last gasp for that, much abused line.

The new chip lines won't be coming out until the third quarter, at the earliest.

That's the Merom, Conroe, and Woodcrest.

Even then, AMD still has some advantage in the Opteron line.

The Conroe seems to be performing very well when compared to the Athlon, but until AMD comes out with their new chips, we won't know just how much of an advantage they will retain, if any.

Intel has pushed the on-die memory controller back at least another 6 to nine months, stating that some of their new tech obviates the need for it. Whether that is true, or they are just having problems integrating it, isn't known yet.

But, Intel responds to poor memory bandwidth with large on-chip caches. That helps, to some extent, but not always.

It's thought that Intel needs until the end of 2007 to catch up, and surpass AMD on all fronts (depending on whether AMD can adequately respond).

Until then, Intel is seen as continuing to lose marketshare to AMD.

This doesn't really affect Apple more than slightly. Possibly for their hi end machines, but that's about it.
post #18 of 26
Quote:
Originally posted by melgross
At this time, the only chips Intel has that are considered to be better than AMD's are the Core technology chips, as represented by the Yonah's. The rest of Intel's line-up is considered to be creaky, at best.

They have just introduced the last of the Pentium 4 line of chips, which is a last gasp for that, much abused line.

The new chip lines won't be coming out until the third quarter, at the earliest.

That's the Merom, Conroe, and Woodcrest.

Even then, AMD still has some advantage in the Opteron line.

The Conroe seems to be performing very well when compared to the Athlon, but until AMD comes out with their new chips, we won't know just how much of an advantage they will retain, if any.

Intel has pushed the on-die memory controller back at least another 6 to nine months, stating that some of their new tech obviates the need for it. Whether that is true, or they are just having problems integrating it, isn't known yet.

But, Intel responds to poor memory bandwidth with large on-chip caches. That helps, to some extent, but not always.

It's thought that Intel needs until the end of 2007 to catch up, and surpass AMD on all fronts (depending on whether AMD can adequately respond).

Until then, Intel is seen as continuing to lose marketshare to AMD.

This doesn't really affect Apple more than slightly. Possibly for their hi end machines, but that's about it.

I would agree that Intel's netburst chips are inferior to AMDs chips. However I feel based on Anandtech's appraisal of Conroe that Intel will begin to have superior chips. We don't know yet how Woodcrest will compare to opteron but I'm guessing it will be better. We already have good evidence to show that Conroe will beat Athlon easily. On the laptop side it's a laugher, Intel all the way. Again by the time Vista comes to market the Intel chips should already be established and I think that is when Intel will regain market share. The wildcard is what will AMD do to respond. However we know also that Intel will beat AMD to 45nm, so they still have another card to play IMO.
post #19 of 26
Quote:
Originally posted by backtomac
I would agree that Intel's netburst chips are inferior to AMDs chips. However I feel based on Anandtech's appraisal of Conroe that Intel will begin to have superior chips. We don't know yet how Woodcrest will compare to opteron but I'm guessing it will be better. We already have good evidence to show that Conroe will beat Athlon easily. On the laptop side it's a laugher, Intel all the way. Again by the time Vista comes to market the Intel chips should already be established and I think that is when Intel will regain market share. The wildcard is what will AMD do to respond. However we know also that Intel will beat AMD to 45nm, so they still have another card to play IMO.

To a certain extent, that's what I said, in a somewhat more staid manner.

But, again, we are talking about investing now. And these chips won't be here untill sometime 3rd quarter to forth quarter. Major sales won't take off until year end.

And then we still have to see what AMD counters with.

The tests for Conroe were very good, but were not the final say, by any means.

I'm, of course, hoping for the best, but for investment purposes, I would stay away for now.
post #20 of 26
Quote:
Originally posted by melgross
To a certain extent, that's what I said, in a somewhat more staid manner.

But, again, we are talking about investing now. And these chips won't be here untill sometime 3rd quarter to forth quarter. Major sales won't take off until year end.

And then we still have to see what AMD counters with.

The tests for Conroe were very good, but were not the final say, by any means.

I'm, of course, hoping for the best, but for investment purposes, I would stay away for now.

I suspect we mostly agree. I like Intel here (under 20) as an investment, but recognize that differing opinions are what make a stock market after all.
post #21 of 26
Quote:
Originally posted by backtomac
I suspect we mostly agree. I like Intel here (under 20) as an investment, but recognize that differing opinions are what make a stock market after all.

I just thought I'd post this for your interest.

Earlier I commented that Apple's price rise depended on what investors thought about this software (BootCamp).

This is a Forbes article about it. I'm running late today, so I didn't see it earlier.

http://www.forbes.com/2006/04/05/app...partner=alerts
post #22 of 26
Quote:
Originally posted by melgross
I just thought I'd post this for your interest.

Earlier I commented that Apple's price rise depended on what investors thought about this software (BootCamp).

This is a Forbes article about it. I'm running late today, so I didn't see it earlier.

http://www.forbes.com/2006/04/05/app...partner=alerts

Looks like the market likes it(bc). I tend to think boot camp could increase market share. This would obviously be a positive on the stock. I've been cautious about Apple's stock but this gives me reason to reconsider.
post #23 of 26
Quote:
Originally posted by backtomac
Looks like the market likes it(bc). I tend to think boot camp could increase market share. This would obviously be a positive on the stock. I've been cautious about Apple's stock but this gives me reason to reconsider.

It definitely could increase market share, we just don't know if it will.

There are people that like Apple hardware but don't like the user interface or the operating system. There are people that aren't going to buy new software to replace software they already own, and there are people that use software that has no adequate counterpart.

If I did video edit work, I'd want to keep the PC software because the Apple software is irritating, IMO. iMovie is pretty dumb and Final Cut Express halts clip playback when I try to use other programs, making the computer effectively a single tasking system.

And then there are the gamers, but desktop Macs simply aren't competitive against desktop Windows systems because there is no consumer Mac tower.

Personally, I would be interested when something like VirtualPC gets updated because the Windows software I use isn't CPU intensive and I don't want to dual boot for a specific program.
post #24 of 26
Quote:
Originally posted by JeffDM
It definitely could increase market share, we just don't know if it will.

There are people that like Apple hardware but don't like the user interface or the operating system. There are people that aren't going to buy new software to replace software they already own, and there are people that use software that has no adequate counterpart. And then there are the gamers, but desktop Macs simply aren't competitive against desktop Windows systems because there is no consumer Mac tower.

Personally, I would be interested when something like VirtualPC gets updated because the Windows software I use isn't CPU intensive and I don't want to dual boot for a specific program.

This is weird. On the forum, your post ends with:

and I don't want to

But, in the Reply box, the entire post is here.

That's what I was going to comment upon the incomplete sentence.

Now, this is REALLY weird. After my post was, er, posted, your reply in the forum is complete.

A lot of little things have been happening here lately.
post #25 of 26
Quote:
Originally posted by melgross
A lot of little things have been happening here lately.

I realized I didn't finish a post, so I fixed it. My post might have been updated between when you saw it and and when you clicked to reply. Many times, I correct my posts, sometimes I catch it before people reply, sometimes I don't.
post #26 of 26
Quote:
Originally posted by JeffDM
I realized I didn't finish a post, so I fixed it. My post might have been updated between when you saw it and and when you clicked to reply. Many times, I correct my posts, sometimes I catch it before people reply, sometimes I don't.

That's funny. I fix my posts sometimes as well, but I've never left a dangling sentence

I got here too soon!
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