THE APPLE INVESTOR: Analysts Race To Raise Estimates Ahead Of Routine Quarterly Blowout

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AAPL Up With Market
Stocks are stabilizing after selling off this morning on worse than anticipated jobs report. Shares of AAPL are trading up 1%. Upcoming catalysts include third quarter earnings announcement on Monday, October 18th at 5:00pm ET; monthly NPD data (Mac / iPod business); iPhone sales updates and carrier diversification; iPad sales updates and expansion; new content revenue streams such as video, books and social (Ping); and the uptake of the newly refreshed Apple TV. AAPL trades at 16x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).

Speak Or Forever Hold Your Peace As Earnings Season Approaches (Various)
Wall Street banter ahead of calendar third quarter:

  • Apple Leads In The First Inning Of The TV War (Bloomberg): Gene Munster talks with Bloomberg’s Betty Liu on Google TV versus Apple TV. The price-point is a big deal and Apple TV at $100 is the magic number. Google TV at $300 is just too high so advantage #1 for Apple. What we are seeing right now is the first inning of a very long battle for the television. Dan Frommer at Business Insider would concur.
  • Verizon iPhone Could Add 11% To Earnings (The Street): In a note titled “Plenty of Growth Left,” J.P. Morgan analyst Mark Moskowitz believes the Verizon iPhone will boost Apple’s earnings by 11% annually, or $2 a share. But Moskowitz does not base his financial projections or his $400 price target on the possibility of the iPhone going to Verizon. Instead, Moskowitz is more jazzed about the current strength of iPhone and iPad sales this year. Verizon is an additive.
  • More Analysts Raise Estimates (Barron’s): William Blair analyst Ralph Schackart increased his estimates on Apple. He now sees quarterly iPhone units at 12 million, up from 11.4 million while iPad estimates go to 4 million from 3.75 million. He has an Outperform rating on the stock. Canaccord Genuity analyst T. Michael Walkley reiterated his Buy rating and $366 target, while raising estimates based on strong trends for the iPad and iPhone as well.
  • Not Too Big To Blow Out The Quarter (Forbes): Oppenheimer’s Yair Reiner raised his iPhone and iPad unit sales estimates (to 12 million and 4.5 million, respectively) as well as his Apple price target (to $345 from $330) and is advising clients to buy the stock in advance of the company’s Oct. 18 earnings report. Apple, he says, is “not too big to blow it out.”

AT&T About To Lose Exclusivity To The iPhone (For Real This Time) (The Wall Street Journal)
The Wall Street Journal stated specifically that the iPhone would be coming to Verizon, the largest wireless carrier in the U.S., in early 2011. The previous reports said only that Apple would make a phone that was compatible with Verizon’s network. Major sticking points in negotiations between Verizon and Apple have reportedly been the wireless carrier’s interest in allowing retail partners to sell the iPhone and Verizon’s promotion of V Cast.

Two Wrongs Don’t Make A Right: Microsoft And Adobe Think Of Merging (The New York Times)
Reports are surfacing that Microsoft and Adobe are kicking the tires on ways to team up against Apple. One of the ideas would be merging the companies (Microsoft would buy Adobe for around ~$16 billion). I have to say, that would not be a pretty pair and I’m not quite sure how that would be helpful to anyone other than Apple. Jay Yarow at Business Insider would agree.

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