January 19, 2011, 11:59 AM ET
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Gene Munster, Piper Jaffray: Reiterates an Overweight rating and raises his price target to $483 from $438. The results defied the law of large numbers, he notes, with “Apple’s vision for itself as a mobile device company targeting a massive market growth opportunity,” he writes. Munster raised his fiscal 2011 estimate to $96.7 billion from a prior $86.8 billion, and raised his EPS estimate to $22.08 from a prior $18.84 per share. He forecasts Apple making $116 billion in fiscal 2012 and $122 billion in calendar ‘12.
Tony Sacconaghi, Sanford Bernstein: Reiterates an Outperform rating and raises his price target to $450 from $400, calling the report “another monstrous quarter,” and asking if Apple “can become the largest cap company in the world.” He’s struck by the fact that the Q2 EPS forecast was higher than the consensus estimate for the first time in 13 quarters. Sacconaghi’s estimates this year go to $24.13 from $20.49 in EPS, with a full-year gross margin expectation of $39.4% on revenue of $101.79 billion in revenue. As for cash, “such a gigangitc hoard is above levels necessary to support any plausible strategic purpose,” writes Sacconaghi. “Particularly given … the material value destruction to investors from the prevailing low interest rate environment.” Sacconaghi notes that a $450 price target would make Apple a roughly $415 billion market-cap company — the biggest in the world, ahead of
Exxon-Mobil (
XOM) at $397 billion. Nevertheless, trading at just 15 times enterprise value as a multiple of free cash for this year, the stock would have a scant 10% premium to the S&P’s valuation, he observes.
Mark Moskowitz, JP Morgan: Reiterates an Overweight rating and raises his price target to $450, from $420. Apple’s valuation is expected to be revised up, as its growth profile is “unrivaled in large cap tech,” writes Moskowitz. The primary investment “homework” is whether Apple can return gross profit to the “39% to 40% threshold over time,” he believes. Moskowitz’s estimate for fiscal 2011 goes to $22.73 in EPS from a prior $20.10, on revenue of $101.5 billion, up from a prior $94 billion estimate. Moskowitz is looking for 43 million iPhones to be sold this fiscal year, up from a prior forecast of 37 million, and 17.4 million iPads, roughly unchanged from before. At a projected 14.8 times calendar 2011 EPS, “Apple is trading like a value stock and not as the high-growth story in large cap equities,” he writes.
Richard Gardner, Citigroup: Reiterates a Buy rating and raises his price target to $415 from $390, while raising his unit estimates for the year across the product line. Gardner was “especially pleased” to see an improvement in the iPhone gross profit margin by several percentage points following the steep drop in fiscal Q4. Like several others, he notes Apple seems not to have had to concede anything on price even as it moved from
AT&T (
T) to
Verizon Communications (
VZ) with the phone. Gardner’s fiscal 2011 estimates go to $22.10 in EPS from $19.20 previously, on $95.7 billion in revenue, up from $86.9 billion. He sees 27 million iPads being sold this year, up from 21.5 million previously, and 60 million iPhones, up from 58 million.
Steven Fox, CLSA Asia-Pacific Markets: Reiterates a Buy rating and raised his price target to $425 from $400. Calling the results “stellar,” Fox focuses in on China, writing that Apple’s “aggressive” expansion in the country is paying off. The company’s stores there generated the highest payoff of any in the region. He also notes that 88% of Fortune 500 companies support iPhone, while 80% are trialing the iPad. Fox thinks the end of exclusivity on iPhone in all regions could boost growth for the device. He raised his unit forecasts to 66 million iPhones this fiscal year, from 64 million, and raised his iPad estimate to 27 million from 25 million. Fox raised his fiscal 2011 from $20 to $22.75 in EPS, on $97.7 billion in revenue.
Kevin Dede, Brigantine Advisors: Reiterates a Buy rating, while maintaining a $400 price target. He expects the fiscal Q2 (March) forecast is enough to reassure investors following announcement of Steve Jobs’s hiatus. Like Fox, Dede notes that the biggest Mac growth — nearly 70%, in fact — was in Asian markets. As for the iPad, it is “in its infancy,” he writes, shipping in only 46 countries, compared to 185 for the iPhone. Dede raised his 2011 estimate on evidence of a “halo” effect across the product line. His new EPS estimate for the year is $21.10, up from a prior $18.50, on sales of $95.3 billion.
Andy Hargreaves, Pacific Crest: Reiterates an Outperform rating, while raising his price target to $420 from $355. The demand for iOS devices was “extraordinary,” writes Hargreaves, and shows Apple’s “dominance” of consumer mindshare. Given the company was supply constrained on iPhone, but still beat Street estimates, Hargreaves expects the momentum for the phone to increase as Apple gets a better handle on production this quarter. Hargreaves also argues that “a return of cash to shareholders would be prudent,” with $59.7 billion in cash and securities. Apple will generate $24.3 billion in free cash this year, he argues, ending the year with $75.5 billion on the balance sheet. “We do not believe Apple could reasonably invest its entire cash blaance in a manner that would be strategically valuable and offer returns that are on part with its current business,” he writes. Apple should consider share repurchase or a one-time or regular dividend. Hargreaves’s estimate for this year goes to $23.75 in EPS from $20.43 previously, on $99.9 billion in revenue, up from a prior $89 billion estimate.
Brian Marshall, Gleacher & Co.: Reiterates a Buy recommendation, and raises his price target to $400 from $355. Marshall writes that the big upside in iPad sales — 7.3 million, versus some 6.2 million expected — suggests Apple can sell 30 million this fiscal year. The company’s gross profit margin of 38.5%, above expectations, was the other big element for him. Marrhsll raised his 2011 revenue estimate to $99.5 billion from a prior $88.8 billion, and raised his EPS view to $23.54 from a prior $19.61. For the calendar year, Apple should hit 104 billion in revenue, he writes.
Apple: Price Targets Up All Around; The Question Of Cash - Tech Trader Daily - Barrons.com
