Lion's AppleWatch

Monday, September 22, 2008

AAPL shares slide on analyst downgrade - buying opportunity?.
Apple shares fell this morning on strength of a downgraded price target announcement from Morgan Stanley as global financial markets continue to bleed.

Shares stand at $139.06 this morning after Morgan Stanley lopped $14 off the target price for Apple, offering revised guidance of $178 - but current share price could be a buying opportunity, as there’s still a c.$40 margin even at the new target price.

It’s not all doom and gloom on Apple stock, with CNN’s Philip Elmer-DeWitt predicting Apple will sell 5 million iPhones in the current quarter, citing Piper Jaffray analyst, Gene Munster.

Munster made his predictions today, and countered the Morgan Stanley target price cut with an increase in his own predictions for the firm - he says he’s “incrementally more confident” in Apple’s unit sales.

2.8 million Macs and 11 million iPod sales complete the triptych of his predictions for Apple’s Q4 sales success, the analyst said.

Munster maintained his existing $250 price target on the stock, reinforcing the notion that Apple shares at current price could represent a profit-making chance. 4:06:58 PM

NBC sees 1 million downloads in 10 days after crawling back to iTunes.
Users of Apple's popular digital storefront had no problem relocating NBC Uni's TV shows now that a new deal... 3:38:25 PM

Analyst: Apple will sell 5 million iPhones in Q4
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Piper Jaffray’s Gene Munster, one of the most bullish — and closely watched — of the more than two dozen analysts who track Apple Inc., has raised his estimates for the company’s fourth quarter, which ends next Tuesday, Sept. 30.

Based on the latest retail sales data from the NPD Group,¬[sgl dagger]Munster writes in a report to clients issued Monday that he is “incrementally more confident” in Apple’s unit sales for its three main product lines and has raised his targets as follows:

Mac units of 2.8 million (vs. 2.5 million previously) in Q4

iPod units of 11 million (vs. 10.8 million)

iPhone units of 5 million (vs. 4.1 million)

Added to the 2.4 million first-generation iPhones Apple sold in the first six months of 2008, that would bring the total number iPhones sold this year to 7.4 million.

Apple has repeatedly expressed confidence that it would sell at least 10 million iPhones in calendar 2008. Reports in early August that Apple’s Asian partners were turning out iPhones at the rate of 800,000 a week led some investors to speculate that the company might reach that goal before the end of September.

If Munster is right, either those reported manufacturing rates were wrong or production has slowed since August.

Munster also notes the iPhone this quarter will, for the first time, account for a “meaningful percentage” of booked revenue. Last quarter, which ended in June, the iPhone accounted for only 4% of booked revenue; this quarter, he estimates, it will account for 21%. To reflect this change, he is publishing a new metric that assumes that the full value of each iPhone sale is accounted for in the quarter in which it is sold (rather than spread out over two years, the life of the standard iPhone contract).

This new metric significantly boosts Apple’s earnings per share, at least on Piper Jaffray’s spreadsheets. For example, Munster on Monday increased his estimate of Apple’s fourth quarter earnings 13%, from his previous estimate of $1.04 a share to $1.17 a share (the Street estimate is $1.11 a share). But under his new metric, booked EPS would come in at $1.60 a share, up 15%. He summarizes these changes in the table at right.

Munster’s price target for calendar year 2009 remains unchanged at $250 a share (based on a booked EPS of $9.14 and a multiple of 27.4). That gives the stock considerable room for upside growth. Apple (AAPL) shares closed on Friday at 140.91, having traded as low as 121.5 the day before. 3:29:04 PM

Apple makes serious inroads into corporate networks; time for businesses to get serious about Macs.
Macs are easy to use and standards compliant. They are built on Unix and support open standards... 3:17:55 PM

RUMOR: Apple's 'Brick' really a 'Mac Pro mini'.
Sources have indicated Apple's 'one more thing,' code named 'Brick' rumored to be announced around October 14th... 3:16:42 PM