Firm boosts Apple target to $110 following Black Friday survey
Shares of Apple Computer reached historical highs on Monday after ThinkEquity Partners released a research note indicating strong sales at the company's retail stores during Black Friday.
Shares of the Cupertino, Calif.-based iPod maker hit an all-time high of $93.16 before retreating over $3.00 to $90.09 in late afternoon trading on the Nasdaq stock market.
In a note to clients, analyst Jonathan Hoopes said a survey of 28 Apple retail stores on November 24 -- dubbed "Black Friday" to signifying the day many retails hope to go from losses (red) to profits (black ) -- suggested likely upside to his estimates for the December quarter.
"Our survey covered 8 states and logged per-hour visitor traffic from as few as 69 visitors in the early morning to over 1,750 visitors in the early evening," he wrote. "According to our observations, Apple's Retail Store conversion rate was over 8 percent on Friday (in other words, we witnessed over 8 purchases for every 100 visitors, on average)."
The analyst noted that the majority of the purchases "fit into a small bag" but added that sales of "larger beyond-the-box items" also appeared healthy. Overall, he estimates that Apple's retail store traffic ranged between 860,000 and 916,000 visitors on BlackFriday, likely generating between $36 million and $41 million in sales.
Following the results of the survey, Hoopes, who maintains a Buy rating on Apple, increased his price target on shares of the company to $110 from $100.
"Never in the history of the PC, has a company been better positioned to both gain share and improve profitability, in our opinion," he wrote. "We believe investors should stay focused with a 'Look at the Core' -- that is, understand that Apple's software holds the keys to both share gains and margin expansion."
Monday marked the second time Hoopes has raised his target on Apple in just over two months. On September 25, he upped his target to $100 from $90 after checks indicated accelerated back-to-school CPU share gains.
Shares of the Cupertino, Calif.-based iPod maker hit an all-time high of $93.16 before retreating over $3.00 to $90.09 in late afternoon trading on the Nasdaq stock market.
In a note to clients, analyst Jonathan Hoopes said a survey of 28 Apple retail stores on November 24 -- dubbed "Black Friday" to signifying the day many retails hope to go from losses (red) to profits (black ) -- suggested likely upside to his estimates for the December quarter.
"Our survey covered 8 states and logged per-hour visitor traffic from as few as 69 visitors in the early morning to over 1,750 visitors in the early evening," he wrote. "According to our observations, Apple's Retail Store conversion rate was over 8 percent on Friday (in other words, we witnessed over 8 purchases for every 100 visitors, on average)."
The analyst noted that the majority of the purchases "fit into a small bag" but added that sales of "larger beyond-the-box items" also appeared healthy. Overall, he estimates that Apple's retail store traffic ranged between 860,000 and 916,000 visitors on BlackFriday, likely generating between $36 million and $41 million in sales.
Following the results of the survey, Hoopes, who maintains a Buy rating on Apple, increased his price target on shares of the company to $110 from $100.
"Never in the history of the PC, has a company been better positioned to both gain share and improve profitability, in our opinion," he wrote. "We believe investors should stay focused with a 'Look at the Core' -- that is, understand that Apple's software holds the keys to both share gains and margin expansion."
Monday marked the second time Hoopes has raised his target on Apple in just over two months. On September 25, he upped his target to $100 from $90 after checks indicated accelerated back-to-school CPU share gains.
Comments
Then again, shoulda bought
Overall, he estimates that Apple's retail store traffic ranged between 860,000 and 916,000 visitors on BlackFriday, likely generating between $36 million and $41 million in sales.
WOW with sales of $41.00 (25% Gross Margins means $10.25 net profits) on Black Friday, things seem peachy.
Maybe they can buy a Big Mac meal with those kind of profits.
edit: not fair correcting the story and the quotes :P
WOW with sales of $41.00 (25% Gross Margins means $10.25 net profits) on Black Friday, things seem peachy.
Maybe they can buy a Big Mac meal with those kind of profits.
Of course with Apple's higher margins, Steve will easily be able to afford a meal at a finer restaurant, such as Chili's.
WOW with sales of $41.00 (25% Gross Margins means $10.25 net profits) on Black Friday, things seem peachy.
Maybe they can buy a Big Mac meal with those kind of profits.
In their rush to prepare for Black Friday (or as Kramer calls it, N-word Friday), they must have forgotten to move their decimals. Oh, well.
Watch out for some nosebleed!
Even analysts need love.
I suppose so, when they resort to stalking mall shoppers to see how big of a bag they carry out of a store.
The stocks down 2.23 so far (after hours trading). And that's on a "good day," in which analysts hiked their ratings, Apple performed well over the weekend and new product rumors still fly. If this is a good day, I'd hate to see a bad one. Black Monday as far as stock holders go.
Today was NOT a "good" day.
Almost all stocks were down due to WalMarts' .1% lower store sales over last year. That brought the market way down. Apple followed.
The DJIA closed down 158.46, the NYSE by 112.84, and the NASD, where Apple trades, by 54.34.
Apples' high today in interday trading was actually an all time high at 93.159. But it faded quickly after that, as the markets rapidly dropped.
Jerks.
Today was NOT a "good" day.
Almost all stocks were down due to WalMarts' .1% lower store sales over last year. That brought the market way down. Apple followed.
The DJIA closed down 158.46, the NYSE by 112.84, and the NASD, where Apple trades, by 54.34.
Apples' high today in interday trading was actually an all time high at 93.159. But it faded quickly after that, as the markets rapidly dropped.
That's unfortunate. Maybe I should go to Babelfish and have it give me as many translations of "overreaction" as it can give me.
2 (3?) quarters of analysts bashing Apple for- sales below expections, demand for [fill in the blank: 2g Nano, 5.5g iPod, movies, mac book] below expections, not enough new products delivered, increased competition, decreased market share, etc all adding up to Apple performing at or below estimates. Lowering targets at every turn. All driving down Apple's share price
The analysts have been down on Apple DESPITE every real world indicator to the contrary - sales, market share, inventory, buzz, reviews, etc.
And NOW Apple is suddenly golden?
Sounds like classic pump and dump to me:
Put a minus spin on the company, short the stock and accumulate Apple stock for your clients quietly as it declines. Profit on the decline and the client sales.
Then buy a bunch of calls then announce Apple is suddenly amazing and let the lemmings chase your new target. Advise your clients to sell in the "early" version of your newsletter, then spread more FUD about Apple in the 1st quarter (iPhone / iTV / iWhatever not here yet/not selling fast enough), etc, etc.
It is not that the analysts are clueless, its that they all have ties to hedge funds and brokerage houses. They are not prognosticating, they are manipulating at arms length from the traders.
This has happened so many times with Apple in the last 3 years that the SEC should investigate.
So let me get this straight:
2 (3?) quarters of analysts bashing Apple for- sales below expections, demand for [fill in the blank: 2g Nano, 5.5g iPod, movies, mac book] below expections, not enough new products delivered, increased competition, decreased market share, etc all adding up to Apple performing at or below estimates. Lowering targets at every turn. All driving down Apple's share price
The analysts have been down on Apple DESPITE every real world indicator to the contrary - sales, market share, inventory, buzz, reviews, etc.
And NOW Apple is suddenly golden?
Sounds like classic pump and dump to me:
Put a minus spin on the company, short the stock and accumulate Apple stock for your clients quietly as it declines. Profit on the decline and the client sales.
Then buy a bunch of calls then announce Apple is suddenly amazing and let the lemmings chase your new target. Advise your clients to sell in the "early" version of your newsletter, then spread more FUD about Apple in the 1st quarter (iPhone / iTV / iWhatever not here yet/not selling fast enough), etc, etc.
It is not that the analysts are clueless, its that they all have ties to hedge funds and brokerage houses. They are not prognosticating, they are manipulating at arms length from the traders.
This has happened so many times with Apple in the last 3 years that the SEC should investigate.
Ouch.
So let me get this straight:
2 (3?) quarters of analysts bashing Apple for- sales below expections, demand for [fill in the blank: 2g Nano, 5.5g iPod, movies, mac book] below expections, not enough new products delivered, increased competition, decreased market share, etc all adding up to Apple performing at or below estimates. Lowering targets at every turn. All driving down Apple's share price
The analysts have been down on Apple DESPITE every real world indicator to the contrary - sales, market share, inventory, buzz, reviews, etc.
And NOW Apple is suddenly golden?
Sounds like classic pump and dump to me:
Put a minus spin on the company, short the stock and accumulate Apple stock for your clients quietly as it declines. Profit on the decline and the client sales.
Then buy a bunch of calls then announce Apple is suddenly amazing and let the lemmings chase your new target. Advise your clients to sell in the "early" version of your newsletter, then spread more FUD about Apple in the 1st quarter (iPhone / iTV / iWhatever not here yet/not selling fast enough), etc, etc.
It is not that the analysts are clueless, its that they all have ties to hedge funds and brokerage houses. They are not prognosticating, they are manipulating at arms length from the traders.
This has happened so many times with Apple in the last 3 years that the SEC should investigate.
Quick, Analyst-Boy!... to the Obfuscatory!
So let me get this straight:
2 (3?) quarters of analysts bashing Apple for- sales below expections, demand for [fill in the blank: 2g Nano, 5.5g iPod, movies, mac book] below expections, not enough new products delivered, increased competition, decreased market share, etc all adding up to Apple performing at or below estimates. Lowering targets at every turn. All driving down Apple's share price
The analysts have been down on Apple DESPITE every real world indicator to the contrary - sales, market share, inventory, buzz, reviews, etc.
And NOW Apple is suddenly golden?
Sounds like classic pump and dump to me:
Put a minus spin on the company, short the stock and accumulate Apple stock for your clients quietly as it declines. Profit on the decline and the client sales.
Then buy a bunch of calls then announce Apple is suddenly amazing and let the lemmings chase your new target. Advise your clients to sell in the "early" version of your newsletter, then spread more FUD about Apple in the 1st quarter (iPhone / iTV / iWhatever not here yet/not selling fast enough), etc, etc.
It is not that the analysts are clueless, its that they all have ties to hedge funds and brokerage houses. They are not prognosticating, they are manipulating at arms length from the traders.
This has happened so many times with Apple in the last 3 years that the SEC should investigate.
Basically, no.
Apple has been doing very well these past 3 years, or so, and therefore, so has the stock. But, Apple is not shielded from all perturbations in the market, or in investor expectations. Look at the price swings this year.
Your theories aren't needed to explain that.
Apple's performance today shows that. The stock rose on analysts reports, and perhaps the Fortune report of a possible Apple Corps deal.
But the poor showing of the worlds largest retail operation put a pall into the market, and so, after rising early in the day, Apple's stock fell with the others.
Basically, no.
Apple has been doing very well these past 3 years, or so, and therefore, so has the stock. But, Apple is not shielded from all perturbations in the market, or in investor expectations. Look at the price swings this year.
Your theories aren't needed to explain that.
Apple's performance today shows that. The stock rose on analysts reports, and perhaps the Fortune report of a possible Apple Corps deal.
But the poor showing of the worlds largest retail operation put a pall into the market, and so, after rising early in the day, Apple's stock fell with the others.
Yes Apple has done well over the past 3 years but that's not my point. Neither is its rise or fall on a single day in a sector trend.
Analysts' price targets have a real impact on the intra-year, quarter to quarter fluctuations. Traders and hedge funds care about small changes in the short term (3-9 months). Individual and institutional investors care about performance over the medium and long term (>1 yr).
If you can get enough traction on a target (up or down) you can profit in the short term. Down and you shake out individuals and institutional triggers, up and you attract both. Either way you win if you know the trend in advance.
If you look at Apple's stock over the 8 quarters, you'll find it is particularly vulnerable to the effects of the analysts opinions. The price swings this year are a pretty good mirror of this. Every one of these analysts who talks about targets either works for or has ties to a hedge fund or investment house.
Note: Apple has become a significant psychological if not fiscal indicator in its sectors. Movement on Apple stock is no longer solely "with the sector" - it in fact determines the sectors to some extent (personal electronics, retail electronics, music, computers, so-called "lifestyle" purchases) This is because Apple sales are a often a decent barometer of leading consumer spending trends, irrespective of the actual dollars spent.
So, if you are an analyst, and you know this stock is vulnerable, when does a prediction become manipulation? Perhaps when an analysts' prediction's flies in the face of all available evidence, and DESPITE constant negatives, the stock and company continue to do astoundingly well. At that point you look at who stands to gain.
One other thing: Please understand that all the analysts that cover this sector know each other well, and each of them personally knows 2/3 to 3/4 of the "market makers" (big traders) in the sector, both in their own company and outside of it. As a consultant to hedge funds at one point in my career, I got to see first hand just how small the clique in each sector was. Everybody knows everybody - and talks with them all day long.
I have no proof of collusion, only suspicions, but if I were the SEC, I would look this over once or twice. I also do not own any apple stock and have not for years. (nothing for or against it, just have my pennies in other places)