Sterne Agee Ups Price Target, Estimates on Apple (AAPL) Saying Rumor About Slowing iPad Momentum are Bunk
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Up: 12 | Down: 19 | New: 21
Rating Summary:
52 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 21
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Another day... another price target hike on Apple (NASDAQ: AAPL).
Today, Sterne Agee's Shaw Wu lifted estiamtes and his price target on the iPad maker from $740 to $750 following checks suggesting recent concerns about weakening iPad momentum is misplaced.
After a barrage of questions from investors on whether speculation of iPad production cuts carry any merit, Wu decided to weigh in.
Supply chain checks suggest these concerns are "misplaced" as it appears that production is "limited more by supply of new HD retina displays and conforming to more sound labor practices vs. slowing demand," he said.
Wu said he is picking up are strong follow-up demand trends for the new iPad despite a very strong start of 3 million units sold in the first few days. "We believe this is likely because the new iPad is a significant upgrade with an HD retina display, quad-core graphics, and 4G LTE wireless. In addition, the price cut on the iPad 2 appears to be helping as well," he states.
He expects supply to improve over the course of the next few quarters as additional production lines and suppliers are added. Also, what could also be causing concern is news that Hon Hai Foxconn employees have had their individual working hours cut. He said this is not due to a slowdown in production but rather conforming to more sound labor practices where there will be a cap on overtime hours per month per employee.
Wu raised his iPad estimate for the March quarter to 12.3 million iPads from 11.5 million and for calendar year 2012 to 63 million from 60 million.
For FY12, his new estimates are $161.2 billion in revenue and $44.50 in EPS (from $160 billion and $43.80 in EPS) vs. consensus at $160 billion and $44.19 in EPS and for FY13, $186 billion and $51.00 in EPS (from $184.4 billion and $50.00 in EPS) vs. consensus at $189.8 billion $50.45 in EPS.
Wu notes his new new price target of $750 is still reasonable and conservative at a 12x multiple on his new CY13 EPS estimate of $54.04 plus $102 in net cash.
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 $628.44 yesterday, with a 52 week range of $310.50-$644.00.
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Today, Sterne Agee's Shaw Wu lifted estiamtes and his price target on the iPad maker from $740 to $750 following checks suggesting recent concerns about weakening iPad momentum is misplaced.
After a barrage of questions from investors on whether speculation of iPad production cuts carry any merit, Wu decided to weigh in.
Supply chain checks suggest these concerns are "misplaced" as it appears that production is "limited more by supply of new HD retina displays and conforming to more sound labor practices vs. slowing demand," he said.
Wu said he is picking up are strong follow-up demand trends for the new iPad despite a very strong start of 3 million units sold in the first few days. "We believe this is likely because the new iPad is a significant upgrade with an HD retina display, quad-core graphics, and 4G LTE wireless. In addition, the price cut on the iPad 2 appears to be helping as well," he states.
He expects supply to improve over the course of the next few quarters as additional production lines and suppliers are added. Also, what could also be causing concern is news that Hon Hai Foxconn employees have had their individual working hours cut. He said this is not due to a slowdown in production but rather conforming to more sound labor practices where there will be a cap on overtime hours per month per employee.
Wu raised his iPad estimate for the March quarter to 12.3 million iPads from 11.5 million and for calendar year 2012 to 63 million from 60 million.
For FY12, his new estimates are $161.2 billion in revenue and $44.50 in EPS (from $160 billion and $43.80 in EPS) vs. consensus at $160 billion and $44.19 in EPS and for FY13, $186 billion and $51.00 in EPS (from $184.4 billion and $50.00 in EPS) vs. consensus at $189.8 billion $50.45 in EPS.
Wu notes his new new price target of $750 is still reasonable and conservative at a 12x multiple on his new CY13 EPS estimate of $54.04 plus $102 in net cash.
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 $628.44 yesterday, with a 52 week range of $310.50-$644.00.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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