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Goldman Goes $850 on Apple (AAPL), Record Margin Is the Most Important Takeaway

April 25, 2012 9:05 AM EDT Send to a Friend
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Price: $98.87 -0.15%

Rating Summary:
    56 Buy, 9 Hold, 3 Sell

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Today's Overall Ratings:
    Up: 19 | Down: 24 | New: 8
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Goldman Sachs lifted its price target on Apple (NASDAQ: AAPL) 13 percent from $750 to $850 after blow-out Q2 results while maintaining its Conviction Buy List rating.

The firm believes the surprising upside is likely to reignite the rally. Sharp upside in iPhone numbers and a favorable commodity cost environment also allowed gross margins to come in at a record 47.4%, versus their estimate of 43.5%, the firm notes.

Of all the good news from the quarter, Goldman said the margin upside has the most important long-term implications for the story. "While these margins should come down in quarters where iPhone mix is less substantial, the results suggest that annual margins can sustainably be much higher than investors previously appreciated," the analyst said.

For CY2012, the firm forecast revenues of $168.29 billion and EPS of $49.70 (FY2012 of $156.49 bn/$45.72), versus $166.92 billion/$45.76 previously. CY2013
revenue and EPS estimates now stand at $203.07 billion and $60.16 (FY2013 of $193.15 bn/$57.19), versus $200.0 billion/$56.57 previously.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $560.28 yesterday.




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Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change

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Goldman Sachs Conviction Buy List, Goldman Sachs

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