Wednesday, November 08, 2006

Calls of Note Part 2

- JP Morgan is positive on Apple (NASDAQ:AAPL) after they yesterday visited Apple's headquarters in Cupertino, California.

The completion of the Intel transition, hefty store traffic, and successful Mac advertising could continue to spur momentum in the Mac business. In addition, the firm continues to believe that the post-holiday launch of Vista will make it even more likely that consumers will consider the Mac platform this quarter.

Management mentioned unnamed new products as a key driver of growth several times during
the meetings. This echoes similarly vague commentary from Steve Jobs regarding the company's product pipeline and supports their view that 2007 could mark an important rebound in product innovation from the company.

The widescreen video iPod and the Apple-branded phone represent two of the most likely new
products and of course, there should be some other unexpected products as well. JP Morgan also believes it is important to stress that none of these products are currently factored into their above consensus estimates for fiscal 2007.

Apple is trading at 25x calendar 2007 EPS ex-options estimate. They expect the iPod's momentum to improve and Mac share gains to accelerate. The firm is reiterating their Overweight rating.

Notablecalls: AAPL did see some buy interest off the positive comments from Piper yesterday. Think the rumors of JP Morgan meeting with the management helped as well. Apple's Mac business grows 8-9x the speed of overall PC business (units), making it one of tech's best stories.

1 comment:

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