Monday, April 06, 2009

Apple (NASDAQ:AAPL): Barclays reiterates Overweight rating, raises tgt to $143 - new portable coming?

Barclays is out with am interesting call on Apple (NASDAQ:AAPL) raising their tgt to $143 from $113 saying the stock remains one of our top picks given its new product pipeline & very strong free cash flow. They believe new products including a new familiy of iPhones in June & an ultraportable later this year should boost shares.

They are raising their pro forma estimates for Apple significantly given their view that the company candeliver a robust new product cycle for iPhones in '09 supporting about $10/sh in annualized FCF. Also, iPhone demand has held near-term better than their conservative ests according to checks.

- Barclays believes AAPL is readying a an ultraportable device for later this yr (not included in ests).

- Given higher iPhone estimates, F2Q GAAP EPS is now $1.00 (was $0.98) w/non-GAAP of $1.37 (was $1.18) on 4% y/y revenue growth to $7.8B. FY09 GAAP EPS is $5.00 (was $4.85) w/non-GAAP of $7.18 (was $6.44) on 10% y/y revenue growth to $35.65B (was $35B).

- Given the iPhone is becoming a much bigger portion of earnings, they focus on "pro forma" EPS
that reverses iPhone subscription accounting. They new price target is $143, 15x our new pro forma estimate of $7.88 for FY10.

Notablecalls: Just wanted to let you know it's out there. I personally feel the stock needs to take a breather (a pause that refreshes, if you please)

PS: Here's what Barclays has to say about the new portable. Pretty interesting:

Note that our Mac and iPod estimates do not include the potential for Apple to ship a new ultra-portable device that we believe could come in 2H calendar ’09. We believe Apple needs to address the netbook market in its own differentiated way. As a result, Apple may introduce a
tablet-like computer/iPod optimized for media, gaming and other key features (possibly iChat). Media reports such as “Apple Plans To Launch Netbook With Touch Screen” (Dow Jones, 3/9/09) back our longstanding views that Apple may launch its answer to the netbook shortly. Media reports discuss a touchscreen size of 9.7-10 inches, which is in line with our longstanding views that the company is working on new form factors to bridge the gap between its iPod touch ($399) and low-end MacBook ($999). We believe that video chat and gaming could be interesting applications for any new device. As a result, we expect any Apple “netbook” to be very different (and “cooler”) than a typical Windows based device with a keyboard. Note that we estimate the netbook market to be 30 million units in 2009 – if Apple can capture just 5% share of this market (comparable to Apple’s worldwide share of notebooks) – it would equate to 1.5 million units and almost $1 billion in revenue per year (assuming a premium ASP of about $600

1 comment:

Nick said...

My stock research prompts me to believe that AAPL is a hold right now. The firerock research element is listing apple fully valued at 122.49 as of 4/6/2009. This may change, however. I find FireRock to have tremendous insight into the true main street valuation of a company. check them out,