New products, possible Verizon deal expected to boost Apple stock
MacBook Pro and iPod refreshes, iPhone 3GS expansion, and a possible data-centric Verizon Wireless device are expected to increase Apple's stock in the short-term, according to a new analysis.
UBS on Monday issued a short-term "Buy" rating on Apple's stock, and also raised the target price from $160 to $170. Analyst Maynard Um, however, maintained the stock's neutral rating for its 12-month forecast.
"Although our concerns regarding the potential impact of broader economic weakness remain," Um wrote, "a full (quarter) of MacBook Pro refreshes & iPhone 3GS expansion internationally should help Sept. (quarter). From a catalyst perspective, a potential data-centric (product) at Verizon Wireless, potential iPod refreshes, & new wireless operators (China, Europe non-exclusives, etc.) may help near term sentiment."
In the past, Um has expressed concern that increased component costs, particularly on LCD panels, could hurt the company's bottom line. He believes, however, that the announcement of a Verizon Wireless product would change the stock's outlook. Of all major analysts surveyed by AppleInsider after Apple's third quarter earnings report, UBS was the only one that was not bullish on AAPL stock.
With his latest report, Um believes that iPhone 3GS expansion, Mac sales and new products will drive the company's revenue higher in the short term. However, he believes it will be somewhat offset by component pricing -- what he calls "the big wild card."
Um notes that Apple's fourth-quarter gross margins are usually lower, though that may be offset this year by higher margins on the iPhone.
In the June quarter, Apple reported record sales on the strength of the Mac and iPhone. The company posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share.
Apple has clearly stated they intend to launch the iPhone in China soon. Last month, a new model of the iPhone for the China Unicom network was approved for use in the country, fueling speculation that an announcement could be nearing.
UBS on Monday issued a short-term "Buy" rating on Apple's stock, and also raised the target price from $160 to $170. Analyst Maynard Um, however, maintained the stock's neutral rating for its 12-month forecast.
"Although our concerns regarding the potential impact of broader economic weakness remain," Um wrote, "a full (quarter) of MacBook Pro refreshes & iPhone 3GS expansion internationally should help Sept. (quarter). From a catalyst perspective, a potential data-centric (product) at Verizon Wireless, potential iPod refreshes, & new wireless operators (China, Europe non-exclusives, etc.) may help near term sentiment."
In the past, Um has expressed concern that increased component costs, particularly on LCD panels, could hurt the company's bottom line. He believes, however, that the announcement of a Verizon Wireless product would change the stock's outlook. Of all major analysts surveyed by AppleInsider after Apple's third quarter earnings report, UBS was the only one that was not bullish on AAPL stock.
With his latest report, Um believes that iPhone 3GS expansion, Mac sales and new products will drive the company's revenue higher in the short term. However, he believes it will be somewhat offset by component pricing -- what he calls "the big wild card."
Um notes that Apple's fourth-quarter gross margins are usually lower, though that may be offset this year by higher margins on the iPhone.
In the June quarter, Apple reported record sales on the strength of the Mac and iPhone. The company posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share.
Apple has clearly stated they intend to launch the iPhone in China soon. Last month, a new model of the iPhone for the China Unicom network was approved for use in the country, fueling speculation that an announcement could be nearing.
Comments
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He believes, however, that the announcement of a Verizon Wireless product would change the stock's outlook.
Let's put it this way. Announcing a product or NOT announcing a product will affect the company's stock outlook. What do you think of those apples.
I don't know what the rest of Appleinsider thinks but these analyst reports are a waste of time. Maybe a poll is in order to see if the readership is even half interested in this stuff. It is just a shame that Appleinsider validates these idiots by printing this crap.
Dave
Appleinsider this is starting to get really old an analysts report is not news and is not a rumor thus is not info we need to see here. I mean really a contract with another cell company might impact Apples stock - who would have thought of such a thing. A prostitute has more reason for being than these guys.
I don't know what the rest of Appleinsider thinks but these analyst reports are a waste of time. Maybe a poll is in order to see if the readership is even half interested in this stuff. It is just a shame that Appleinsider validates these idiots by printing this crap.
Dave
Totally agree- but just like anything similar, I ignore it. I mean if this were written 3 months ago, it might have some credence but now as is? total BS.
MS introduced a lot of new products and gained market share in a lot of markets in the last 10 years and yet its stock went no where with it's 10% average growth
Mac's to Apple are like bastard step children. like windows and office is to MS. it's a source of cash you can't give up but there is no more innovation and the growth is low single digits at best. The cool stuff for Apple are the consumer devices and for MS the server business and X-Box
Brilliant.
As far as individual investors go, unless Apple offers a dividend, they're only going to be a short term opportunity. It just can't be justified as a buy and hold stock, it's always going to be a buy and sell.
Yeah, this makes a lot of sense...
Maybe a poll of people who bought and held Apple 8-10 years ago is in order. We could ask them how much they miss those dividends that GM and Citigroup were giving out...
As far as individual investors go, unless Apple offers a dividend, they're only going to be a short term opportunity. It just can't be justified as a buy and hold stock, it's always going to be a buy and sell.
You're right. That's been my experience.
When you think about it, Apple has the talent and potential to deliver some products that consumers will lust after. I have a new 13" MBP and the wife has a new Air and I'm ready to lust for more - like a new iMac.
The netbook market is still open for a tablet or a 10" - 11" MBP.
New iPods for the Holiday Season, maybe even an iPhone Nano?
And the list goes on. It's called Apple's Fall Potential in my books.
I don't know what the rest of Appleinsider thinks but these analyst reports are a waste of time. Maybe a poll is in order to see if the readership is even half interested in this stuff. It is just a shame that Appleinsider validates these idiots by printing this crap.
Dave
It's no biggie to me. It is almost always clear from the title when they will be putting up annalysts claims. Easy to skip if you have no interest.
Me, I read them for two reasons.
1) even if I don't think a pundent has a clue, it can be informative to hear what others might be hearing and taking for fact. This is true for me with any kind of reporting, not just financial. And
2) I get some perverse pleasure out of seeing how long it takes before someone posts "these analysts are all idiots!!!1!". It is the same with patent claim articles and the inevitable "well, I patented air (or the word 'the' or binary numbers).
He should be ignored.
In other words: stuff that Apple may or may not do in the near future may or may not affect their stock price positively or negatively.
Brilliant.
That's as good a summary as any analysts report.
I think Apple is getting ready to jolt the market and the stock market in the near future. The back-to-school special ends around September 1st and I'm looking for some new products at that time.
When you think about it, Apple has the talent and potential to deliver some products that consumers will lust after. I have a new 13" MBP and the wife has a new Air and I'm ready to lust for more - like a new iMac.
The netbook market is still open for a tablet or a 10" - 11" MBP.
New iPods for the Holiday Season, maybe even an iPhone Nano?
And the list goes on. It's called Apple's Fall Potential in my books.
No, the Back To School selling season has already begun. Something that Apple needs to be taken to task over, IMO. There ARE retail selling seasons that they simply do not take advantage of, and that is simply bad business.
In other words: stuff that Apple may or may not do in the near future may or may not affect their stock price positively or negatively.
Brilliant.
That's money, right there. You've just qualified to be an analyst. In fact, you've pretty much summed up the extent of most analysts' average knowledge on the subject.
As far as individual investors go, unless Apple offers a dividend, they're only going to be a short term opportunity. It just can't be justified as a buy and hold stock, it's always going to be a buy and sell.
That's hilarious.
As far as individual investors go, unless Apple offers a dividend, they're only going to be a short term opportunity. It just can't be justified as a buy and hold stock, it's always going to be a buy and sell.
I'm not sure what you are arguing here. I think Apple should declare a dividend, not because they don't have growth potential, but because they have far more cash on hand than they can reinvest sensibly in their business.
Yeah, this makes a lot of sense...
Maybe a poll of people who bought and held Apple 8-10 years ago is in order. We could ask them how much they miss those dividends that GM and Citigroup were giving out...
I've been an AAPL stockholder for 12 years. I think they should have declared a modest dividend two or three years ago.
the growth is down to 10% which is a dead money stock
MS introduced a lot of new products and gained market share in a lot of markets in the last 10 years and yet its stock went no where with it's 10% average growth
Mac's to Apple are like bastard step children. like windows and office is to MS. it's a source of cash you can't give up but there is no more innovation and the growth is low single digits at best. The cool stuff for Apple are the consumer devices and for MS the server business and X-Box
Are you trolling or just stupid?
Apple is innovating in all it's core businesses and they ALL FEED ON EACH OTHER. An investment in one area benefits all other areas.
As far as individual investors go, unless Apple offers a dividend, they're only going to be a short term opportunity. It just can't be justified as a buy and hold stock, it's always going to be a buy and sell.
That's not true at all. I bought a large amount of Apple in mid 2004, and have bought more over time. Look at the price back then, and the split, and you'll see why you are wrong.
the growth is down to 10% which is a dead money stock
MS introduced a lot of new products and gained market share in a lot of markets in the last 10 years and yet its stock went no where with it's 10% average growth
Mac's to Apple are like bastard step children. like windows and office is to MS. it's a source of cash you can't give up but there is no more innovation and the growth is low single digits at best. The cool stuff for Apple are the consumer devices and for MS the server business and X-Box
Apple's growth this year is down to 10% because we're in the middle of the biggest worldwide recession since the Great Depression. No doubt, over time, this will be known as the Great Recession.
Don't use numbers of a company during a major financial crisis as your new expected growth rate. Doing that shows you have no long term understanding of Apple and its markets.
Considering that Apple is doing much better than expected during this time, you should be taking that into account vs other comparable competitors.