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AAPL Tanking With The Rest
Stocks are sharply lower in early trading as the S&P downgraded the U.S. debt outlook to negative, and as global worries are mounting with Greek debt default looming and China taking another step to curb its runaway inflation. Shares of AAPL are off with the rest of tech. Upcoming catalysts for the stock include results of its second fiscal quarter on Wednesday, April 20 at 5:00 p.m ET; any update regarding Steve Jobs‘ healthy return; the WWDC starting June 6; monthly NPD data to gauge Mac / iPod businesses; iPad 2 sales updates; iPhone sales updates, the push in China, as well as the launch of the iPhone 5 (whenever that may be); new revenue streams such as video, books / publishing and social (Ping); moving iTunes into the cloud; and the continued evolution and adoption of Apple TV. Shares of Apple trade at 12x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).Last Minute Earnings Adjustments Due To iPhone And iPad Strength (Apple Insider)
JP Morgan analyst Mark Moskowitz raised estimates for Apple’s second fiscal quarter, boosting revenue from $23.83 billion to $24.42 billion. He expects continued growth from the iPhone and iPad to contribute to the out-performance. Mark reiterates his year-end price target of $450 and Overweight.
Will They Or Won’t They Launch Into The TV Business? (Various)
The peanut gallery weighs in:
- Marco Arment doesn’t believe so. One reason is that TVs are an extremely competitive, commoditized market with very slim margins and most purchasing decisions going to whoever has the most features. A bigger problem is that Apple prefers to offer fully integrated products, but a modern TV is just one component in a mess of electronics and service providers.
- Chris Dixon says it’s possible. Based on previous comments, Steve Jobs doesn’t believe an “additional box” is a viable strategy for seriously entering the TV industry. This leaves three places to enter: 1) integrating into set top boxes, 2) integrating into other TVs, or 3) Apple creating its own TV.
Apple Will Lead The Market This Week With Earnings (Seeking Alpha)
Analysts are expecting another blowout quarter from Apple. Peter Oppenheimer, Apple’s CFO, “expects revenue of $22 billion and diluted earnings per share of about $4.90.” As usual, guidance will likely be well below analysts’ expectations. The biggest question in the conference call will be whether or not, and how much, Japan will affect the sales for the next quarter.
Apple Stock Is Cheap (Seeking Alpha)
The company is worth a closer investigation and could be leveraged for upside on any better than expected news. The stock trades at forward price-to-earnings of 12.38x (ex-cash is 10.9x), price-to-sales of 4.01x with a PEG ratio of 0.7x. For all of the stock price’s performance strength, the company trades at stunningly low valuations. Despite various concerns, the stock is cheap enough to buy and that the company continues to have intriguing opportunities and ammunition for growth.