Wall Street cheers Apple's "outstanding" second-quarter
Analysts on Wall Street are largely applauding Apple's performance during the March quarter, with many of them this week initiating more bullish views of the company's prospects going forward. Included is a run down analyst ratings and price target changes, along with some excerpts from their commentary.
Piper Jaffray: Buy ($180)
Piper Jaffray analyst Gene Munster, who maintained his Buy rating and $180 price target on Apple shares, encouraged investors to pour money into the Cupertino-based company, adding that he expects Steve Jobs to return to the company, though possibly in a reduced role such as Chairman with Tim Cook adopting the permanent CEO role.
"We remain buyers of AAPL; March quarter results confirm that demand for Apple's products remains strong despite a tough macro environment," he said. "New iPhones and the potential for Jobs to return in June should be catalysts for shares to move higher over the next several weeks. We expect growth to re-accelerate when macro trends improve."
Oppenheimer & Co: Outperform ($140)
Oppenheimer & Co. analyst Yair Reiner raised his estimates and price target on shares of Apple from $120 to $140.
"Apple continues to defy the common misconception that, as a premium brand, it's destined to underperform in a time of economic duress," he said. "Apple products aren't cheap, but the resiliency in their demand suggests they're creating a lot of value-not by cutting prices (like most peers) but primarily by increasing utility. The strategy is working now and should work doubly well when the world emerges from its current morass."
Barclays Capital: 1-Overweight ($155)
Barclays Capital analyst Ben Reitzes remains upbeat about Apple's product pipeline, maintaining an Overweight rating on the company's shares and edging his price target up from $143 to $155.
"In short, we believe the 2Q09 report was very solid and should provide more fuel for shares into the summer ahead of major new product launches and a potential return of Steve Jobs," he said. "We look forward to hearing from Apple next at its Worldwide Developers Conference June 8-12 in San Francisco and then we expect another major new product event in September."
Needham & Co: Strong Buy ($200)
Needham & Co. analyst Charlie Wolf, always one of the more colorful analysts covering Apple, maintained his Strong Buy rating and $200 price target on shares of the company.
"In an economy that shows only tentative signs of recovery, Apple reported what must be viewed as an outstanding quarter," he said. "The bigger news not captured in second quarter results is the phenomenal success of the iPhone/iPod touch App Store. [...] In our view, the iPhone is building a software competitive advantage in the smartphone market that competing platforms will find difficult, if not impossible to challenge. This advantage, in turn, should translate into market share gains for the iPhone down the road.
Caris & Company: Buy ($150)
Caris $ Co. analyst Robert Cihra reiterated his Buy rating and $150 price target on shares of Apple, adding that he sees "big" iPhone opportunity going forward.
"We continue to model a refresh to iPhone 3.0 late-June and lower priced model w/ China ramping CQ3E," he wrote. "We haven?t modeled but also continue to see the prospect of a new 7-inch iPhone-like Mac tablet (?iPad??), particularly as Windows 7 now gets set to add native touchscreen support (including multi-finger touch) and we imagine Apple will want to have a competing large-screen touch Mac, particularly given its own in-house capacitive touch-sensing tech/investments."
RBC Capital Markets: Outperform ($165)
Even Royal Bank of Canada analyst Mike Abramsky crawled out from under his rock, upgrading shares of Apple from Underperform to Outperform and boosting his price target on the stock by a whopping $70 from a dismal $95 to a more respectable $165.
"Apple's valuation has outperformed Nasdaq by 37%, despite decelerating Macs, recession, management uncertainty," he said. "We underestimated Apple's 'VIP,' investor willingness to look beyond near-term challenges, focus on iPhone leadership and the stability of cash, and belief Apple will continue to out-innovate peers. We believe Steve Jobs is already reengaged with creative work, and is likely to return to helm Apple."
Other analyst
Goldman Sachs's David Bailey reiterated his Neutral rating and edged his price target from $125 to $130.
Citigroup's Richard Gardner reiterated his Buy rating and nudged his price target to $152 from $147.
Bernstein Research's Toni Sacconaghi maintained his Outperform rating and bumped his price target from $135 to $140.
Pacific Crest's Andy Hargreaves reiterated his Buy rating and raised his price target to $150 from $120.
Morgan Stanley's Kathryn Huberty maintained an Equal Weight rating with a price target of $105, up from $100.
Piper Jaffray: Buy ($180)
Piper Jaffray analyst Gene Munster, who maintained his Buy rating and $180 price target on Apple shares, encouraged investors to pour money into the Cupertino-based company, adding that he expects Steve Jobs to return to the company, though possibly in a reduced role such as Chairman with Tim Cook adopting the permanent CEO role.
"We remain buyers of AAPL; March quarter results confirm that demand for Apple's products remains strong despite a tough macro environment," he said. "New iPhones and the potential for Jobs to return in June should be catalysts for shares to move higher over the next several weeks. We expect growth to re-accelerate when macro trends improve."
Oppenheimer & Co: Outperform ($140)
Oppenheimer & Co. analyst Yair Reiner raised his estimates and price target on shares of Apple from $120 to $140.
"Apple continues to defy the common misconception that, as a premium brand, it's destined to underperform in a time of economic duress," he said. "Apple products aren't cheap, but the resiliency in their demand suggests they're creating a lot of value-not by cutting prices (like most peers) but primarily by increasing utility. The strategy is working now and should work doubly well when the world emerges from its current morass."
Barclays Capital: 1-Overweight ($155)
Barclays Capital analyst Ben Reitzes remains upbeat about Apple's product pipeline, maintaining an Overweight rating on the company's shares and edging his price target up from $143 to $155.
"In short, we believe the 2Q09 report was very solid and should provide more fuel for shares into the summer ahead of major new product launches and a potential return of Steve Jobs," he said. "We look forward to hearing from Apple next at its Worldwide Developers Conference June 8-12 in San Francisco and then we expect another major new product event in September."
Needham & Co: Strong Buy ($200)
Needham & Co. analyst Charlie Wolf, always one of the more colorful analysts covering Apple, maintained his Strong Buy rating and $200 price target on shares of the company.
"In an economy that shows only tentative signs of recovery, Apple reported what must be viewed as an outstanding quarter," he said. "The bigger news not captured in second quarter results is the phenomenal success of the iPhone/iPod touch App Store. [...] In our view, the iPhone is building a software competitive advantage in the smartphone market that competing platforms will find difficult, if not impossible to challenge. This advantage, in turn, should translate into market share gains for the iPhone down the road.
Caris & Company: Buy ($150)
Caris $ Co. analyst Robert Cihra reiterated his Buy rating and $150 price target on shares of Apple, adding that he sees "big" iPhone opportunity going forward.
"We continue to model a refresh to iPhone 3.0 late-June and lower priced model w/ China ramping CQ3E," he wrote. "We haven?t modeled but also continue to see the prospect of a new 7-inch iPhone-like Mac tablet (?iPad??), particularly as Windows 7 now gets set to add native touchscreen support (including multi-finger touch) and we imagine Apple will want to have a competing large-screen touch Mac, particularly given its own in-house capacitive touch-sensing tech/investments."
RBC Capital Markets: Outperform ($165)
Even Royal Bank of Canada analyst Mike Abramsky crawled out from under his rock, upgrading shares of Apple from Underperform to Outperform and boosting his price target on the stock by a whopping $70 from a dismal $95 to a more respectable $165.
"Apple's valuation has outperformed Nasdaq by 37%, despite decelerating Macs, recession, management uncertainty," he said. "We underestimated Apple's 'VIP,' investor willingness to look beyond near-term challenges, focus on iPhone leadership and the stability of cash, and belief Apple will continue to out-innovate peers. We believe Steve Jobs is already reengaged with creative work, and is likely to return to helm Apple."
Other analyst
Goldman Sachs's David Bailey reiterated his Neutral rating and edged his price target from $125 to $130.
Citigroup's Richard Gardner reiterated his Buy rating and nudged his price target to $152 from $147.
Bernstein Research's Toni Sacconaghi maintained his Outperform rating and bumped his price target from $135 to $140.
Pacific Crest's Andy Hargreaves reiterated his Buy rating and raised his price target to $150 from $120.
Morgan Stanley's Kathryn Huberty maintained an Equal Weight rating with a price target of $105, up from $100.
Comments
Back to work.
I love you AI but can you please be consistent in the way you present the figures? In other words make all of them read "from $$ to $$" or vice versa. Thanks.
Agreed, they did make it unnecessarily difficult to understand the numbers at a quick glance. It is always fun to watch these "experts" keep shoving their foot down their mouths even further every quarter, though, no matter how the article is laid out.
Lesson one: Never buy shares in a company you do not know anything about.
Lesson two: If you know anything about Apple Inc you don't need to listen to this waffle.
At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise.
Back to work.
Yeah, it stinks but stock always goes down when they think it's being pumped (talked up), also, most investors, I kid you not, realize that Apple's bread and butter, the iPhone, could very well take a hit with the release of smarter phones and 50 million users with contracts about to expire.
Equally, the reason the stock has sored the past few months was due to the 3.0 software talk, not the refresh.
You have to know how to play the market, its normally the opposite of what you think.
VIsit the stock websites and read what STRONG BUYERS and STRONG SELLERS have to say, each has a goal to either scare or give confidence to the holder. After 911, if you were smart, you sold, but what happened, stocks went up, still sell though, why, well after 2-3 weeks it went down and some say since then, the market has crashed and never recovered.
Then google STOCK BASHER and STOCK PUMPER. (seller and buyer).
Good luck and always deal with someone you trust dude, please don't listen to anyone in a forum, even here and especially with money. Read, read, read. ..
I love you AI but can you please be consistent in the way you present the figures? In other words make all of them read "from $$ to $$" or vice versa. Thanks.
Yeah. Sorry.
K
... also, most investors, I kid you not, realize that Apple's bread and butter, the iPhone, could very well take a hit with the release of smarter phones and 50 million users with contracts about to expire. ...
Your analysis of how the stock market works is spot on, but this comment is patent nonsense.
If you want to speculate on what the impact of future hardware releases will be, you have to include the fact that Apple is itself going to be releasing new hardware in a month or two. There is absolutely no reason, based on the information available to expect Apple's leading position in the smart-phone horse race to change much at all, let alone go down because of the hypothetical introduction of "smarter" phones from other quarters.
Apple currently has the best product in the category and all indications are that the iPhone 3.0 products will be similarly so.
You've woven this fantasy out of pure hot air.
At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise.
Back to work.
Possibly linked to Apple cutting 1,600 retail jobs?
Memo To Balmer & Gates
Please disregard the praise heaped on that no account company Apple. Let them go on their merry old way. Just look at your performance despite the very difficult times look at all the money you made. So its less than usual big deal you are on the Right Track. Keep it up. For goodness sake---- Do Not Do what you have in the past "copy Apple". Do your own thing. !!!!
HT
blah blah blah.... do anybody listen to these guys?
Lesson one: Never buy shares in a company you do not know anything about.
Lesson two: If you know anything about Apple Inc you don't need to listen to this waffle.
It's incredible how these guys can make money by acting like brainless lemmings...after hitting it all wrong all the time with their predictions about a "doomed" Apple in a recession-ridden environment, now they praise the company and predict wonderful times ahead with bullish stock prices...until they fall again or Apple does something they haven't "predicted", of course.
I am glad Apple doesn't get intoxicated by that kind of hype, the same hype that virtually destroys the global financial system with their vapor-based ratings and brings the U.S. and other countries close to bankruptcy (unless you wanna insist in acting like a Zealot and believing that the dollar's strength has an objective basis)...
Once more, keep it up Apple...and fuck the moronic analysts who haven't got a clue on the economy.
Yeah. Sorry.
K
hah, techstud...you're a joke!
somebody said they think investors are aware that "the iPhone, could very well take a hit with the release of smarter phones"
however one of the analysts points out "the iPhone is building a software competitive advantage in the smartphone market that competing platforms will find difficult, if not impossible to challenge"
That's a pretty bold statement. I personally don't see anyone truly competing with the iPhone. Apple came in with the iPod and stole the entire market. We're watching it happen all over again, right before our very eyes.
"...he expects Steve Jobs to return to the company, though possibly in a reduced role such as Chairman with Tim Cook adopting the permanent CEO role."
I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.
This is the smartest thing Munster has said recently (other than his buy recommendation)...
I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.
I really would be surprised if this happened. Once your the boss you don't want to be under someone again.
anyway that is what delegation is for. haha
At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise
To add salt to the wound, MSFT is up 10% after reporting their first ever decline in quarterly revenue and their quarterly profits are off -32% as compared to a +15% in AAPLs quarterly earnings.
I have to admit that MSFTs P/E is pretty low for a company earning as much per share,and paying a dividend, as they do and with the Cash in the bank that they have.
Possibly linked to Apple cutting 1,600 retail jobs?
Reference above numbers and consider Mr. Softy is cutting 5000 actual jobs. The "1600" is just a reduction in the number of hours consumed at Apple retail, not necessarily a reduction in staff. I think thats a pretty good idea, while it was neat, it always seemed they have about 30% more employees than space permitted in their retail stores.
This is the smartest thing Munster has said recently (other than his buy recommendation)...
I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.
Anything like that would remind me of Bill Gates and his useless roles of "Chief Software Architect", "Chief Dumbass My-Fridge-Uses-Windows Clairvoyant" and "Chief Eternal Predictor of Successful Windows Tablets"...
SJ is NOT like that and will NOT settle with a symbolic role that has no decision-making power.
Anything like that would remind me of Bill Gates and his useless roles of "Chief Software Architect", "Chief Dumbass My-Fridge-Uses-Windows Clairvoyant" and "Chief Eternal Predictor of Successful Windows Tablets"...
SJ is NOT like that and will NOT settle with a symbolic role that has no decision-making power.
Jobs would still have input on product and direction of the company, but Cook would have to make the final decisions. Jobs has seen his mortality with these illnesses, and would likely understand this new reality. He wouldn't endanger Apple just to feed his ego. The fact that he did in fact take a leave of absence is proof of that. Otherwise, he would work at the helm until he dies or crashes the company. (Guess it's obvious I have Star Trek metaphors on the mind right now... can't wait to see the reboot!)
Your analysis of how the stock market works is spot on, but this comment is patent nonsense.
If you want to speculate on what the impact of future hardware releases will be, you have to include the fact that Apple is itself going to be releasing new hardware in a month or two. There is absolutely no reason, based on the information available to expect Apple's leading position in the smart-phone horse race to change much at all, let alone go down because of the hypothetical introduction of "smarter" phones from other quarters.
Apple currently has the best product in the category and all indications are that the iPhone 3.0 products will be similarly so.
You've woven this fantasy out of pure hot air.
I was merely mentioning that Apple has done well with the iPhone and to use extreme caution right now. The iPhone is doing well, the netbook, while great on paper and possible by Apple, it doesn't have a place right now between the air and MacBook.
If you a or anyone is serious, to to message boards and watch to see what company execs do. I have seen sting buys only to see an executive dump millions of shares a few days later, sure enough, about a week after the dump, news comes out that damages the stock price, just a tip. Also visit sites like the register or inquirer as these site will have info weeks before it makes it to wall street and most owners if these site will understand Wallm Street.
With regard to new iPhone, sure it will probably be great but none of this changes the fact that millions of users will have contracts expire in June, the same time that near smartphones are supposed to come out. If any if these non iPhones have an app store, flash and tethering, this could be a headache for Apple.
We've never seen Apple at a time like this so we don't know what will happen. Now imagine microsoft releases the new os without having to worry about 6 more various operating systems and runs fine on older hardware.
IMHO and this is all it is, an opinion, personally I believe Apple could be facing situations it's never had to face before. Worse is when you have a failing economy, expected to get worse, and all stock firms suggest a string buy. Normally when you see this, use caution.
Cheers.
Jobs would still have input on product and direction of the company, but Cook would have to make the final decisions. Jobs has seen his mortality with these illnesses, and would likely understand this new reality. He wouldn't endanger Apple just to feed his ego. The fact that he did in fact take a leave of absence is proof of that. Otherwise, he would have worked until he died at the helm.
Well, if he is at the stage of passing the helm, he is either dead or seriously ill already, so any symbolic roles are irrelevant.
On the other hand, if SJ is back on track by June, he will be firing on all cylinders...nothing less.