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AAPL Up Modestly
Stocks are trading in a narrow range today as economic fears continue. Apple is up $5 to $254 ahead of June quarter earnings to be released on Tuesday, July 20, 2010 at 5:00 p.m ET. Other future catalysts include monthly NPD data (Mac / iPod business); iPad and iPhone 4 sales updates; and quite possibly the entrance into the TV market. AAPL trades at 21x estimated fiscal-year 2010 EPS and 11x Enterprise Value / Trailing Twelve Months Free Cash Flow.
- Kaufman Bros. analyst Shaw Wu reiterated his Buy rating on shares of Apple and raised his price-target to $349. He also cut his June quarter iPhone forecast to 7.5 million units from 9 million, asserting that near-term iPhone estimates are “likely too aggressive due to inventory drawdown and supply constraints.”
- J.P. Morgan equity derivatives strategists Amyn Bharwani and Marko Kolanovic are recommending purchase October $250 calls while selling October $280 calls (call spread). The strategists are citing Apple analyst Mark Moskowitz’s thesis (Apple is “the growth story without rival”) and increased price-target of $390.
The iPad Not cannibalising The Mac (CNet)
Piper Jaffray analyst Gene Munster says he sees no signs of the iPad cannibalising Mac sales. According to NPD data, Mac sales were up 37% year over year for the first two months of the June quarter suggesting sales of between 3.1 and 3.2 million Macs for the quarter, in line with analyst estimates. The “iPad provides a meaningfully different value proposition.”
Apple Will Be Able Crush Google In Mobile Ads (theMacObserver)
Apple is leveraging iTunes user data to target iAds, which will make ads more user specific and targeted. By offering advertisers that targeting ability, they get more value for their ad dollars on the iPhone platform. Something that might not be as effective on Android, Blackberry or Windows 7. Google doesn’t have as much control over user data. Apple is set up to out-target Google in the mobile space.
iOS Powering Apple TV Might Just Work (Wired)
Based on articles last week, Apple might be cooking a revamp of its TV set-top box using the iOS platform. Reasons it would be an instant hit: 1) Connected living room; 2) Huge user base; 3) TV apps; 4) Motion-based gaming; and 5) alternatives to cable. It’s a natural extension of the “hobby” and an amazing customer alternative to the existing cable and satellite providers.
iPad Production Pushed Over 2 Million Units in July (World Of Apple)
A report from DigiTimes claims that Apple has ramped production of the iPad beyond 2 million units for the month of July, revised from 1.2 million units. The company could be ramping up production as the iPad will be released in Austria, Belgium, Hong Kong, Ireland, Luxembourg, Mexico, Netherlands, New Zealand and Singapore at the end of July.