Apple is cutting down its component orders for iPods, iPhones, and MacBooks, but Citi’s Richard Gardner says buy the stock anyway. In a note today, Gardner said he’s adding AAPL to the bank’s “top picks live” list, and reiterates his “buy” rating.
Why? He says Apple’s cutbacks on iPod and iPhones production are already baked into the stock, which is down almost 40% this year ytd. “At this point, we do not believe 10 million iPod revenue units and 1-1.5 million iPhone units during the March quarter would constitute a surprise to investors,” he says.
Other key “buy now” arguments: iTunes movie rentals should entice people to upgrade to video-capable iPods; the company is still building more computers than the Street estimated; Flash memory pricing has dropped substantially, which should improve Apple’s margins; and the upcoming 3G iPhone could be a big hit, especially in Europe.
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