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AAPL Mixed In Struggling Market
Shares of AAPL are trading sideways today as the market is mixed after an upbeat outlook by FedEx. Future catalysts for Apple stock include a possible refresh of the Mac line; iPhone availability in 17 more countries this Friday; monthly NPD data (Mac / iPod business); iPhone unit updates and exclusivity expiration in the U.S and other major European countries; iPad shipment ramp and international expansion; new content revenue streams such as video and books; and possible entry into the TV market with a refresh of Apple TV. AAPL trades at 22x estimated fiscal-year 2010 EPS and 14x Enterprise Value / Trailing Twelve Months Free Cash Flow.
Wall Street Playing Great offence And Setting the Bar Low (Fortune)
Apple guided the Street to a September quarter of about $18 million in revenue. Given that the company has historically beat guidance by about 11%, you’d assume the Street would be somewhere close to $20 billion. Not this time. Analysts estimates are just marginally over at about $18.3 billion guidance. So either analysts are betting that Apple was hyping its revenue forecast or sending a message about the death grip fallout. More than likely analyst are simply setting the bar low so clients who follow their advice and buy the stock might be pleasantly surprised come the end of the quarter.
White iPhone Delay Doesn’t Affect Estimates (UBS Investment Research)
Apple announced that white models of the iPhone 4 will not be available until “later this year” as manufacture challenges continue beyond what the company anticipated. No impact to black models, which continue to see solid demand, however there are several conspiracy theories that the delay reflects fixing the antenna problem. Maynard Um at UBS views the delay of the white iPhone 4 as net neutral as management’s outlook and guidance likely did not embed sales of the white models given the ongoing manufacturing challenges. He reiterates his Buy rating and $340 price-target.
Buy Shares Of Apple And Microsoft Says Barron’s (Barron’s)
According to Barron’s columnist Eric Savitz, both shares of Apple and Microsoft are attractive: Apple, despite the tepid margin outlook for the current quarter, the fact is that the stock has nearly tripled over the past 18 months; and Microsoft – because of upcoming initiatives, including the roll-out of the first smartphone using the new Windows Phone 7 OS and the debut of Kinect. He also points out that Microsoft’s shares are “super cheap.” The stock trades at just 11x consensus forecast for the June 2011 fiscal year, a consensus number that seems destined to rise. One is the value play and one is the growth stock.
Apple Might Be Forced To Lower Pricing On iPhone (The Street)
Apple may be forced to lower iPhone prices over time due to competitive pressures. iPhone pricing remained strong at an average of $595 for the June quarter compared with $593 for the industry. Research firm Trefis does not believe Apple can sustain these high prices and estimates iPhone pricing will decline from to $413. Since iPhone sales account for nearly half of Apple’s stock value, in the unlikely event that the current average price holds over the long term, it would create a 20% upside to the $337 Trefis price estimate for Apple’s stock. Click here to create your own estimates and price-target.
Beyond AAPL: Three Other Stocks To Play (Daily Finance)
To capture some of the value that Apple is creating, look at these three companies:
- Skyworks Solutions (SWKS): The company develops semiconductors primarily for mobile devices. Last quarter the company saw a 44% spike in revenues and the growth ramp is likely to continue for some time.
- Synchronoss Technologies (SNCR): This company operates ConvergenceNow Plus+, which helps mobile device operators activate new customers. In the last quarter, Synchronoss saw its revenue increase 19% to $35.1 million. Synchronoss recently purchased FusionOne which could mean another jump in revenue.
- eBay (EBAY): A key part of the company’s turnaround strategy relies on mobile devices. eBay will transact about $1.5 billion in sales through mobile devices this year, 2.5x more than last year. And eBay’s main iPhone shopping app has seen 11 million downloads this year. The company also recently purchased RedLaser, which allows people to use their iPhones to read bar codes and engage in comparison shopping.