Analysts scramble to polish their Apple estimates
With Apple’s second-quarter earnings due Wednesday, some of the two dozen analysts who follow the stock have dusted off their spreadsheets, taken a fresh look at their models, and come to some last-minute conclusions.
The trend, starting with MacBook sales, is mostly bullish for Apple (AAPL); the four analysts we know of who have published new reports in the past 24 hours have pushed their Macintosh sales estimates up 100,000 to 300,000 above the Street consensus of 2.0 million. Their estimates of iPod sales, by contrast, fall below the 10.7 million consensus target. Their iPhone numbers are all over the lot, ranging from 1.5 to 2 million. For why this may be so, see Apple Q2 earnings: What to watch.
The exception to this bullish sentiment is Shaw Wu of American Technology Research. A long-time Apple supporter, he issued a turnabout report on Tuesday in which he downgraded the stock from Buy to Neutral, warning clients that Apple’s shares are near his target of 175, with only 4% appreciation ahead of it and a 15% to 20% downside risk. “We continue to be upbeat on the potential for a strong 2H product roll-out,” he writes. “However, we are concerned there could be a vacuum before then. Our supply chain checks indicate 3G iPhones will not likely ship in volume until July and new Macs until the Sept. quarter, likely putting stress on the June quarter.”
Below: our working spreadsheet of the latest estimates (e-mail subscribers click here). If you’re an analyst and want your numbers added to the list, you can e-mail me here.
Looking for analyts’ target prices? Mike from Helsinki early Tuesday posted a summary on TMO’s Apple Finance Board. Here’s his list, edited slightly for clarity:
Daedalus Capital: $300 by the end of this year, $600 during next year
Piper Jaffray: $250
Needham: $235
Friedman, Billings, Ramsey: $225
Lehman Bros.: $195
CitiBank: $212
RBC Capital:$190
Merrill Lynch: $180
Morgan Stanley: $175
Goldman Sachs $185
Caris & Co.: $170
Downgrade
Morgan Keegan: $133
[Update: Reader Terry Gregory points out that he maintains a complete list of brokerage targets for Apple, color coded for upgrades and downgrades, at AAPLinvestors.net. Click here.]
Daedalus Capital: $300 by the end of this year, $600 during next year????
I would say that I want whatever these guys are smoking, but I don’t want to totally lose sight of reality. Sure, I wish it were true, but those figures really seem ridiculous.
Morgan Keegan had better get some new analysts, because they really seem way off the mark. Apple also got downgraded today by AmTech which is rather unpleasant news to my ears.
People keep saying Apple won’t disappoint, but I don’t have the courage to bet the farm on that nonsense. Last year most analysts said we’d be sitting above $200 this year, and that was the biggest miss ever. Their dreams seem to get the best of them and cause investors to suffer.
Dave is right, Gene is the only one who doesn’t bend in the wind. I posted this on another blog yesterday and I feel it is appropriate here as well:
“If analysts always upgrade/downgrade what is the point of having price targets? They don’t ever stick to their guns, all they do is go with the flow or the flavor of the month if you will. AAPL’s business is NO DIFFERENT than it was 3 months ago when everyone’s price targets were $10-20 lower. Sign me up for the stock market weatherman job where I can be paid 6 figures to be wrong 75% of the time!”
$600 per share? That seems a bit far fetched. That would put Apple’s market cap at $532 billion perhaps making it the country’s most valuable company. Maybe the world’s. Past Exxon Mobile, well past GE, Microsoft.
Their like roaches coming out nof the woodwork. Except for Gene, where were all these clowns when Apple was at 115-120? Still performing at the circus I imagine.
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Silicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
What he said according to Market Watch…
In a note to clients, analyst Shaw Wu based the move on the stock’s valuation and what he described as “high expectations” that have pushed the stock up more than 40% in the last month. “While we believe Apple will report a strong quarter relative to guidance and published consensus estimates, we are concerned whether it will be good enough and whether investors will be as forgiving with conservative guidance,” the analyst wrote.
And I agree with him because now all these analysts joining the BUY bandwagon a little too late along with their high predictions and expectations… sorta like when everyone was guessing how much iPhones were sold last year. Did any of them recommend a buy when AAPL was at 120-130 less than 2 months ago? I’m glad I was one of the few lucky ones that bought AAPL at 120 when everyone seems to be bailing out. I love buying AAPL… when it’s the right time.