THE APPLE INVESTOR: Wall Street Rates Macs' Back-To-School Makeover

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AAPL Down Slightly In Weak Market
On a slow news day with durable goods orders report indicating economic growth is slowing, shares of AAPL are slightly down. Future catalysts for Apple stock include an  iPhone 4 availability in 17 more countries this Friday; monthly NPD data (Mac / iPod business); iPhone unit updates and AT&T exclusivity expiration; 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 15x Enterprise Value / Trailing Twelve Months Free Cash Flow.

What Analysts Are Saying About The Mac Line Refresh (Various)
Wall Street tries to be relevant:

  • Tavis McCourt at Morgan Keegan believes the Mac refresh was build into guidance. Price points remain the same with the exception of a new stock keeping unit at the high end of the MacPro line. He believes the cost will almost certainly go up relative to the previous version, but this is part of the normal course of Apple’s product upgrade strategy. He reiterates his Outperform rating.
  • Kaufman Brothers analyst Shaw Wu says the Mac line refresh is positive and should help reinvigorate the Mac business, one of the slower growers last quarter. He finds it interesting that there is no MacBook Air refresh which remains to be seen if the product is still relevant given iPad filling in space between the MacBook and iPod touch. He reiterates his Buy rating.
  • Maynard Um at UBS believes the Mac refresh into the back-to-school season could drive better unit sales – every incremental 100,000 Mac units of approximately $0.04 of EPS to the September quarter. The strong product portfolio should continue to drive growth momentum. He maintains his Buy rating and price target of $340.

iPad to Be Number One Gift For the Holidays This Year (9To5Mac)
Despite critics, the iPad is believed to be the show stopper during the holidays this season according to UK retailer Dixon’s International. If notebook cannibalization or Tim Cook’s comments on supply are any indication, Apple is poised to have an even bigger calendar fourth quarter than last year.

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