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Apple still better positioned than most, firm says

post #1 of 18
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Even as stocks melted down on Monday and fears of tough recession set in, analysts at Piper Jaffray held strong to their Buy rating on shares of Apple, saying the company remains the best positioned amongst its peers to weather the economic storm.

"We recognize investors do not see light at the end of the tunnel as market fears appear to be outweighing fundamental analysis," analyst Gene Munster wrote in a note to clients as Apple shares slid nearly 18 percent to a 52-week low of $105.26.

For his part, however, Munster remains confident in his outlook for the Cupertino-based company and offered a number of supporting arguments.

While the consumer market is clearly slowing, Wall Street's models on Apple already account for reduced spending, but at the same time may be over-discounting the company's Mac growth prospects, he said.

The analyst estimates the company to achieve 40 percent Mac growth for the entire 2008 fiscal year, with 16 percent growth in fiscal 2009. He also expects 19 percent growth during the fiscal first quarter of 2009 (Dec.), all of which are above Street estimates.

"Overall, we believe Street models are too low for Mac in fiscal 2009," Munster wrote. "This fear of a Mac slowdown is driven by US durable goods data, and the NPD data point from two weeks ago, suggesting Mac growth has slowed from 43 percent year-over-year in July to 23 percent in August."

Those figures may turn heads when taken at face value, but represent a difficult compare year-over-year, he explained. Last August, Apple saw a burst of Mac sales after introducing the first major redesign of its iMac line in years. This year many consumers may be holding off purchases in anticipation of new MacBook, MacBook Pro and iMac models which have yet to see an introduction.

The analyst also believes concerns that Apple will be forced to take a steeper hit on gross margins will also "prove to be overblown." He's modeling the company to guide December quarter margins to come in around 30 to 31 percent, or above its overall fiscal 2009 guidance of 30 percent.

Lastly, Munster said fears that the company will be forced to make a disappointing pre-announcement of September quarter results appear to be unsubstantiated, with signs suggesting the company will actually beat Street estimates once again.

"We do not believe Apple will preannounce a disappointing September quarter," he wrote. "Our analysis of two months of NPD data on Mac and iPod, which has a 0.90 correlation, suggests 5 percent upside to Street numbers."

The analyst maintained his Buy rating and $250 price target on shares of the company, as well as its place on his firm's Alpha List.

"We believe fears of a continued global slowdown will impact equity investments in the tech sector," he wrote. "But our thesis leads us to conclude that Apple is better positioned than other tech players to weather the storm."
post #2 of 18
I agree. Even though the economy is poor, good products will keep Apple ahead of the competition. Never forget that MacWorld has a way of building excitement and the fact that Apple has the best CEO and presenter on the planet. Hey when Steve Jobs speaks, the world listens. When he speaks, other CEO's take style notes. "And One More Thing......." Apple products work great!
post #3 of 18
Gene is literally the only analyst that has a clue i swear. The rest are numpties.
post #4 of 18
So many players are getting into the market. Also, Apple is still at the whim of AT&T. A $250 target price is so irresponsible that Munster should be shot. I am always astounded at how much financial analyst profess they know, and how wrong they usually are. However, they never fail to try their best at manipulating the market for their own gain.
post #5 of 18
Quote:
Originally Posted by CREB View Post

So many players are getting into the market. Also, Apple is still at the whim of AT&T. A $250 target price is so irresponsible that Munster should be shot. I am always astounded at how much financial analyst profess they know, and how wrong they usually are. However, they never fail to try their best at manipulating the market for their own gain.

I dont think this analyst can be accused of that, he has been on the ball as much as is humanly possible. He practically mirrors my thinking, and I'm never wrong
post #6 of 18
When they say a price target, what does that mean? It will hit the price in the next quarter, year, or when?
post #7 of 18
The fact that the potential Mac notebook buyers are awaiting the new models is spot on I reckon.

I'm in the market for a new laptop, got the hankering for a MacBook Pro after a bad experience with a PC notebook thats sworn me off that particular company. I'm sick of PCs and the whole Windows crap as well so Macs, here I come!

I've been visiting Apple's website on and off for over a year, reading about MacOS, the systems but the time was never right money wise. I've experienced their customer service when I had a (weird) iPod nano issue a couple of years ago (they could have told me to bugger off but they were spot on!) and the design of the iPod Touch I got in spring reminded me of how things SHOULD be done. Boot Camp was a sad necessity as well as I have more than a few games I want to keep that are windows based.

Thankfully in the summer when I decided it was time to get a Mac I'm glad I looked around sites like this first, was about to jump for a pro but then find out its due for revision so I've been waiting impatiently since! I'm sure I'm not the only one ready to dump the shackles of a crappy OS but we're just waiting for Apple's next release!

That and the app store gaining maturity (have you SEEN Kroll yet???) I think Apple don't have to worry!
post #8 of 18
Quote:
Originally Posted by CREB View Post

So many players are getting into the market. Also, Apple is still at the whim of AT&T. A $250 target price is so irresponsible that Munster should be shot. I am always astounded at how much financial analyst profess they know, and how wrong they usually are. However, they never fail to try their best at manipulating the market for their own gain.

The substantial industry growth of Macs has nothing to do with AT&T. In exactly one year from now Apple will have completed its last quarter for including iPhone sales from the original June 2007 launch (and of course will be including sales from the other 7 quarters after it) so I think Munster is the only one looking at the big picture here.
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Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #9 of 18
Except for his target price of $250, which I think should be a bit lower, I agree with this analyst. He's one of the better ones.
post #10 of 18
Quote:
Originally Posted by StuBeck View Post

When they say a price target, what does that mean? It will hit the price in the next quarter, year, or when?

Year.
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post #11 of 18
I am not sure what the market will do - but I have been filling up on these cheap shares. I may be proved wrong but they seem like a good deal to me. I have been a huge fan of Apple for many years and work with Macs and Linux and Windows machines. Their market capitalization is impressive so it seems to me in my naivety that they are well suited to weather almost any storm. Money in the bank and creating great products that simply work !
The new iPhone is a mini-mac with connectivity built-in imho. Hopefully they will bring the developers along as it becomes more powerful.
I too am waiting for the new MacBooks
I secretly enjoy the wait, perhaps I am a masochist

Long Live Steve!
post #12 of 18
Are there any publicly available guides that keep track of what these guys say vs. how it really turns out?

The closest I've found is this:
http://guides.macrumors.com/Gene_Munster_%28Analyst%29

It doesn't keep track of target prices or other financial information.

The guy may or may not have reasonable numbers. The core message of not freaking out applies to anything.

The above page link is a wiki, so it may be worth posting that information there.
post #13 of 18
Quote:
Originally Posted by JeffDM View Post

The closest I've found is this:
http://guides.macrumors.com/Gene_Munster_%28Analyst%29

Looking at the analysts their listed predictions, Munster has the highest percentage of hits over misses and the most hits, by a long shot. Some of the stuff is hard to quantify as a prediction that new Macs are coming in mid-October is more likely to be true, IMO, than many of the odd predictions that some of the analysts are making. And, as you note, none of the predictions include stock projections, only products.
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post #14 of 18
Apple will be in the $200 range around January and it’s not unreasonable at all to expect and see it reach $300 by end of 2009. Been in Apple for 15 years and anyone who cares to research the history as it relates to the markets and the products will see that everytime Apple tanked in the past 8-10 years it was because of bad market or world conditions - NEVER because of Apple fundamentals.

The idiots that are still listening to the anal-ists and bankers who occupy seats in all the very institutions that got us into this financial meltdown and mess (not only now, but also in the previous two crashes) …brokerage firms and institutions that are asking for bailouts...because they really knew what they were doing right?????

Well anyone still taking their advise after that track record is even dumber and deserves to loose their pants
post #15 of 18
Quote:
Originally Posted by breeze View Post

Been in Apple for 15 years and anyone who cares to research the history as it relates to the markets and the products will see that everytime Apple tanked in the past 8-10 years it was because of bad market or world conditions - NEVER because of Apple fundamentals.

I can vouch for this. They've consistently bucked the trends.

I've been in AAPL since 2000. I cashed out 75% at 185 and 190 late last year so I could buy my house. (Thanks Apple - you've been so good!)

Now I'm back at 111...

And excited...

post #16 of 18
My brother is a stock analyst, and according to him, Gene Munster is the guy they all listen to when it comes to Apple's stock. He has consistently been correct in his calls.
post #17 of 18
Alot of the downside pressure on Apple stock is because fund managers and hedgies are raising cash to meet redemptions.

You can't short 800 stocks so the NASDAQ and commodities are bearing the brunt of the selling.

A deep recession will affect Apple's performance. No one is immune.
In a world of universal deceit, telling the truth is a revolutionary act.
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In a world of universal deceit, telling the truth is a revolutionary act.
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post #18 of 18
Quote:
Originally Posted by monstrosity View Post

I dont think this analyst can be accused of that, he has been on the ball as much as is humanly possible. He practically mirrors my thinking, and I'm never wrong

It looks like he is the 2nd best, after Andy Zaky. Worst is Katy Huberty of Morgan Stanley.

http://apple20.blogs.fortune.cnn.com...ok-a-nosedive/
45 2a3 300b 211 845 833
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