Investors should give Apple's Q1 2013 call 'another look,' Barclays says
Though sentiment following Apple's earnings call for the first quarter of fiscal 2013 was overwhelmingly negative, one analyst believes the call deserves a second look to highlight the positives, including the company's strong cash flow.
Ben Reitzes of Barclays issued a note to investors on Tuesday in which he declared Apple's most recent quarterly earnings call as one that "deserves another look." Barclays has an "overweight" rating for AAPL stock with a price target of $575.
Reitzes noted that while investors have shown concern about competition and execution, he believes there were "major positives" during the earnings call. In particular, he noted Apple's strong cash flow, and a conservative margin outlook that he believes could "grow on investors now that the damage is done."
He believes Apple could hold an event by April to debut new iPads and Macs, as well as potentially preview the next version of iOS. Reitzes also expects that Apple will ship two new iPhones this summer, as recent rumors have suggested, though he doesn't expect that either model will feature a screen larger than the 4-inch display on the iPhone 5.
Reitzes also said that investors may not fully appreciate the opportunity for growth that Apple has in China. He noted that sales for the iPhone doubled in greater China during the December quarter, even though the iPhone 5 was only available for a portion of the quarter.
And another positive for the company comes from the fact that demand for the Apple TV remains strong despite what he characterized as an aging product. During the December quarter, Apple sold more than 2 million units ? an increase of 60 percent year over year.
"The current iteration of Apple TV was introduced in September 2010 with a performance update in March 2012," he said. "We believe the product's performance in the December quarters shows that the TV interest is there and there is demand for an Apple presence in the living room. We are looking for Apple to release a more comprehensive television solution based on services that are integrated with hardware sometime in the next year."
Some analysts have come out in support of Apple after the stock took a tumble following last week's earnings report. On Monday, Chris Whitmore of Deutsche Bank issued a note to investors saying he doesn't believe the company's current stock price accurately reflects the "stickiness" of Apple's iOS platform, which will keep users buying Apple devices in the future.
"iOS users have made a significant investment in time and dollars into the iOS platform, and as a consequence the switching costs are remarkably high," Whitmore said.
Ben Reitzes of Barclays issued a note to investors on Tuesday in which he declared Apple's most recent quarterly earnings call as one that "deserves another look." Barclays has an "overweight" rating for AAPL stock with a price target of $575.
Reitzes noted that while investors have shown concern about competition and execution, he believes there were "major positives" during the earnings call. In particular, he noted Apple's strong cash flow, and a conservative margin outlook that he believes could "grow on investors now that the damage is done."
He believes Apple could hold an event by April to debut new iPads and Macs, as well as potentially preview the next version of iOS. Reitzes also expects that Apple will ship two new iPhones this summer, as recent rumors have suggested, though he doesn't expect that either model will feature a screen larger than the 4-inch display on the iPhone 5.
Reitzes also said that investors may not fully appreciate the opportunity for growth that Apple has in China. He noted that sales for the iPhone doubled in greater China during the December quarter, even though the iPhone 5 was only available for a portion of the quarter.
And another positive for the company comes from the fact that demand for the Apple TV remains strong despite what he characterized as an aging product. During the December quarter, Apple sold more than 2 million units ? an increase of 60 percent year over year.
"The current iteration of Apple TV was introduced in September 2010 with a performance update in March 2012," he said. "We believe the product's performance in the December quarters shows that the TV interest is there and there is demand for an Apple presence in the living room. We are looking for Apple to release a more comprehensive television solution based on services that are integrated with hardware sometime in the next year."
Some analysts have come out in support of Apple after the stock took a tumble following last week's earnings report. On Monday, Chris Whitmore of Deutsche Bank issued a note to investors saying he doesn't believe the company's current stock price accurately reflects the "stickiness" of Apple's iOS platform, which will keep users buying Apple devices in the future.
"iOS users have made a significant investment in time and dollars into the iOS platform, and as a consequence the switching costs are remarkably high," Whitmore said.
Comments
When will this analyst "herd" ever learn? They need to understand they are not the experts they think they are. As a business owner, I would have taken one look at Apple's Q1 results and been very satisfied. When you look at revenue and profit share, Apple is still in command of their business and shows little sign of backing off. Maybe the days of exponential growth are slowing down, but Apple finally has a solid foundation to rely on. After the results were reported, some of these so-called analysts would have you believe Apple is going out of business tomorrow. My favorite absurdity was the statement that confidence in Apple is at a 10 year low. That is so off it's not even funny. If you want real entertainment, just keep watching what these "analysts" say about Microsoft.
And that's just my humble non-expert non-analyst opinion.
AMZN up almost 11% now in AH!
They missed every damn metric on their earnings, yet the stock rises like crazy!
Q4 EPS - .21 - .06 worse than analyst estimate of .27! MISS
Revenue $21.27 Billion, consensus estimate = $22.27 Billion MISS
Net Income decreased 45%! MISS
WTF!!!!
What kind of retards and crack heads are there on Wall Street!?
Strong companies like Apple get punished, weak, crappy companies that miss their earnings and are extremely overvalued keep getting rewarded, even though they keep reporting embarrassing and crappy results.
Quote:
Originally Posted by Apple ][
AMZN up almost 11% now in AH!
They missed every damn metric on their earnings, yet the stock rises like crazy!
Q4 EPS - .21 - .06 worse than analyst estimate of .27! MISS
Revenue $21.27 Billion, consens us estimate = $22.27 Billion MISS
Net Income decreased 45%! MISS
WTF!!!!
What kind of retards and crack heads are there on Wall Street!?
Strong companies like Apple get punished, weak, crappy companies that miss their earnings and are extremely overvalued keep getting rewarded, even though they keep reporting embarrassing and crappy results.
LOL, I was just about to post this. Can't wait to see AMZN latest P/E. I'm guessing it went up.
I think Apple should release products every month or two if they could instead of waiting to release everything once a quarter.
Quote:
Originally Posted by ifij775
Quote:
Originally Posted by Apple ][
AMZN up almost 11% now in AH!
They missed every damn metric on their earnings, yet the stock rises like crazy!
Q4 EPS - .21 - .06 worse than analyst estimate of .27! MISS
Revenue $21.27 Billion, consens us estimate = $22.27 Billion MISS
Net Income decreased 45%! MISS
WTF!!!!
What kind of retards and crack heads are there on Wall Street!?
Strong companies like Apple get punished, weak, crappy companies that miss their earnings and are extremely overvalued keep getting rewarded, even though they keep reporting embarrassing and crappy results.
LOL, I was just about to post this. Can't wait to see AMZN latest P/E. I'm guessing it went up.
Yep! AAPL took the fall, and the referees are making a makeup call for AMZN.
I think it's funny to compare the full report:
http://www.thestreet.com/story/11825971/1/amazon-revenue-soars-22-stock-surges.html?puc=CNNMONEY&cm_ven=CNNMONEY
Note that Apple's revenues increased more than Amazon's.
Apple exceeded guidance and consensus. Amazon did not.
Apple's forward guidance was down slightly, but still for a profit. Amazon's forward guidance was down considerably.
Apple's profit increased, Amazon's did not.
AMZN's bread and butter (physical book sales) had its worst quarter in years - up only 5%. Apple's bread and butter (phones) was up by double digit amounts.
Before the earnings announcement, AMZN's P/E was over 3500. Apple's was around 10 (even before adjusting for cash).
Yet AAPL plummets and AMZN soars.
Absolutely amazing.
You know, I find this to be Onion-level shit right there. It's as if we're looking for the 'silver lining' with a company that just announced a horrible quarter.
Apple just announced the most successful quarter of any company in HISTORY. They made more revenue than any other company on the planet has EVER made in a quarter. They sold more shit than any technology company has sold in history. Yet we're advised to "take another look", as if there's maybe some sliver of redeemable news buried under catastrophic news, as if the company posted a loss. "Highlight the positives"? They need highlighting, really? The greatest quarter in history needs highlighting? Simply unreal.
Oh, and I love that hilariously misleading graph. It's like they tried so fucking hard to come up with something visually that looks bad, and settled on a misleading linear graph plotting exponential growth, which is just beyond insane. Guess what? It's alot easier for me to make $1 and double my performance tomorrow and make $2. It's a bit tougher to continually double when I'm making $40,000,000,000 a quarter.
Quote:
Originally Posted by jragosta
I think it's funny to compare the full report:
http://www.thestreet.com/story/11825971/1/amazon-revenue-soars-22-stock-surges.html?puc=CNNMONEY&cm_ven=CNNMONEY
Note that Apple's revenues increased more than Amazon's.
Apple exceeded guidance and consensus. Amazon did not.
Apple's forward guidance was down slightly, but still for a profit. Amazon's forward guidance was down considerably.
Apple's profit increased, Amazon's did not.
AMZN's bread and butter (physical book sales) had its worst quarter in years - up only 5%. Apple's bread and butter (phones) was up by double digit amounts.
Before the earnings announcement, AMZN's P/E was over 3500. Apple's was around 10 (even before adjusting for cash).
Yet AAPL plummets and AMZN soars.
Absolutely amazing.
You have to remember, the same thing happened with Exxon (and other gas stocks) when gas prices skyrocketed a few years ago. Now it's AAPL. Anytime you have a stock on top, it's a prime target for speculators. Pair that with zealous analysts and the results you get are fairly wide swings in stock that don't follow your typical stock patterns.
Amazon isn't on top, so it won't be treated as a speculative stock like AAPL is.
Bottom line, it's criminal and stock speculations have a way of redistributing wealth back from the bottom (average investors) to the top (speculators).
Quote:
Originally Posted by drblank
After Christmas, I've been to the local Apple Store to see how much different the foot traffic is, and I talked to a buddy that works there, and he said it's calmed down a little during the week, but it's STILL packed wall to wall with people on weekends. But it seems like they are getting more serious buyers than the kids just playing around. The times i've been there, I surveyed mostly people in their 40's to 60's and they were buying systems, phones, tablets. Pretty much everything seemed to be selling. It wasn't slanted towards one product or another. I also noticed PCs being brought in to have the data transferred. I don't know what it looks like all over, but it does make sense that things would calm down in certain places. From what I've read, the bigger stores in the bigger cities are packed regardless. But the iPod business drys up since those are popular Christmas stocking stuffer type items.
I think Apple should release products every month or two if they could instead of waiting to release everything once a quarter
While anecdotal, that's good to hear.
I think that Apple is going to try to release products as the technology becomes available, and... and it makes business sense! No sense replacing a product that is selling well.
I suspect that Apple will release a new Mac Pro and upgraded Final Cut Pro early April -- to coincide with NAB. There, also could be some Retina iPad iOS/App announcements around NAB.
We could see an iPad Retina in March, technology permitting.
WWDC in July should bring iOS 7.
There are opportunities for:
updated/new AirPort Base Station with 802.11ac
updated/new AppleTV
updated/new TimeMachine
new HomeServer
combos of the above
Bumps to Macs and iDevices to add 802.11ac (or activate it in already released devices)
An iPhone 5S
A new low-price iPhone and/or a special iPhone for China Mobile
Anyway, there are a lot of things that could happen through July...
Originally Posted by ifij775
LOL, I was just about to post this. Can't wait to see AMZN latest P/E. I'm guessing it went up.
3479.68 today.
I am hardly an expert on the subject, but then again, neither are most of those clowns on Wall Street.
Somebody should release a book outlining how to choose and pick successful stocks and how to profit.
Step 1 - invest in companies that are more overvalued than even the price of tulips in Holland, 1637. If this company happens to be losing hundreds of millions of dollars each quarter, then that's a huge benefit for you as a shareholder. You should go out and celebrate each time this company misses it's quarterly results. You have found a winning company and you will be richly rewarded.
Step 2 - Whatever you do, make sure to stay away from unsuccessful companies like Apple, that only bring in tens of Billions of dollars each quarter and continues releasing innovative and disruptive devices that have completely changed many industries, devices that every other competitor on the market envies and tries to copy, though rather unsuccessfully.
If a 16 year old high school kid comes home with F- grades and he tells his parents that he also happened to get a girl knocked up, would the father go out and buy his son a Corvette? Well it seems to me as if AMZN is that 16 year old kid, and I have no idea who the dumbass father is, but I am glad that it's not me.
Quote:
Originally Posted by jragosta
I think it's funny to compare the full report:
http://www.thestreet.com/story/11825971/1/amazon-revenue-soars-22-stock-surges.html?puc=CNNMONEY&cm_ven=CNNMONEY
Note that Apple's revenues increased more than Amazon's.
Apple exceeded guidance and consensus. Amazon did not.
Apple's forward guidance was down slightly, but still for a profit. Amazon's forward guidance was down considerably.
Apple's profit increased, Amazon's did not.
AMZN's bread and butter (physical book sales) had its worst quarter in years - up only 5%. Apple's bread and butter (phones) was up by double digit amounts.
Before the earnings announcement, AMZN's P/E was over 3500. Apple's was around 10 (even before adjusting for cash).
Yet AAPL plummets and AMZN soars.
Absolutely amazing.
I rarely short a stock... but this insanity has to come crashing to reality soon. Amazon will not become the new Sears, and Apple is not Gateway Computer.
Both Apple and Amazon have amazing eyeball and credit card stickiness. The Market fears that Apple isn't sticky enough to keep the growth in iDevice sales, and Amazon can just print money with every ebook sold, and people will read more books than the cans of pop they drink in a year, and then amazon will sell them weightloss ebooks as well.
Yes, Amazon's reach is basically endless... You can sell, or help sell, just about everything on Amazon. But there is such a thing like competition, and the walmarts and the targets and the tesco's of the world aren't rolling over and dying at the sight of Amazon's 'growth' (or lack thereof). Bezos however sells Amazon as selling anything to anyone. Limitless.
Apple's issue is that its reach has a self-defined limit. It won't sell something to everyone. It will make its one (or 10) things useful to as many people as possible. and not one more. For those people who buy these things, there will be other things that will make it more useful (apps, music, media, and books), and make you buy an upgraded device From Apple in a couple years when your device becomes obsolete. But that makes the market scared that Apple won't try to sell $9.99 iAir to people who can't afford $19.99 iRocks, who can't afford an iPod shuffle, and woe to Apple if their overall margins slip if they do.
The market sees the barrier to entry for Apple is too high for the other 5Billion people that haven't bought an iDevice, and that Android, and BB10, and Win8 will be so cheap that people will immediately go to Amazon and buy stuff with the savings.
At least that's the only story that makes sense.
Quote:
Originally Posted by Apple ][
I am hardly an expert on the subject, but then again, neither are most of those clowns on Wall Street.
Somebody should release a book outlining how to choose and pick successful stocks and how to profit.
Step 1 - invest in companies that are more overvalued than even the price of tulips in Holland, 1637. If this company happens to be losing hundreds of millions of dollars each quarter, then that's a huge benefit for you as a shareholder. You should go out and celebrate each time this company misses it's quarterly results. You have found a winning company and you will be richly rewarded.
Step 2 - Whatever you do, make sure to stay away from unsuccessful companies like Apple, that only bring in tens of Billions of dollars each quarter and continues releasing innovative and disruptive devices that have completely changed many industries, devices that every other competitor on the market envies and tries to copy, though rather unsuccessfully.
If a 16 year old high school kid comes home with F- grades and he tells his parents that he also happened to get a girl knocked up, would the father go out and buy his son a Corvette? Well it seems to me as if AMZN is that 16 year old kid, and I have no idea who the dumbass father is, but I am glad that it's not me.
Or, consider a different step: unless you have short-term liquidity needs (in which case, I would feel very badly for you), develop a little patience, and have a longer horizon.
I have no doubt that both AAPL and AMZN will adjust to their long-run equilibrium value within some reasonable horizon (especially the latter, as they try to hit the EPS for the next fiscal year implied by their Forward P/E ratio -- watch it come down with a thud).
Quote:
Originally Posted by TheOtherGeoff
But there is such a thing like competition, and the walmarts and the targets and the tesco's of the world aren't rolling over and dying at the sight of Amazon's 'growth' (or lack thereof).
Moreover, Amazon's sales tax advantage is slowly, but surely eroding in state after state.
Originally Posted by Apple ][
AMZN up almost 11% now in AH!
They missed every damn metric on their earnings, yet the stock rises like crazy!
Q4 EPS - .21 - .06 worse than analyst estimate of .27! MISS
Revenue $21.27 Billion, consensus estimate = $22.27 Billion MISS
Net Income decreased 45%! MISS
WTF!!!!
What kind of retards and crack heads are there on Wall Street!?
Strong companies like Apple get punished, weak, crappy companies that miss their earnings and are extremely overvalued keep getting rewarded, even though they keep reporting embarrassing and crappy results.
"weak, crappy companies..." You know how uninformed and childish you come across writing that about Amazon? Amazon, in it's own way, is as revolutionary as Apple. Has the share price gotten ahead of the fundamentals? Obviously, but to ignore the fact many consider it the main future competition for companies like Visa and MC, and that it has put other companies out of business is ridiculous.
Share price gotten ahead of fundamentals? Surely you jest. Their share price has been stratospheric for years - and there are no fundamentals to speak of. They've earned less than $5 B in their entire history. Apple earns that much in a good month.
Revolutionary? Like no one ever thought of selling books online before? No one ever had a massive distribution system (ask Walmart to show you their distribution system sometime).
Your post is a prime example of how ridiculous the evaluations are. Amazon gets a free ride for no good reason while Apple gets torn down no matter how well they do.