Preview: Apple (AAPL) iPad, iPhone Momentum Expected to be Solid for Q410, But is the "Whisper" Too High
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Price: $169.02 +1.27%
Revenue Growth %: -4.3%
Financial Fact:
Total operating expenses: 6.05B
Today's EPS Names:
NLY, CP, RUSHA, More
Revenue Growth %: -4.3%
Financial Fact:
Total operating expenses: 6.05B
Today's EPS Names:
NLY, CP, RUSHA, More
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Apple (Nasdaq: AAPL) is trading higher ahead of the company's fourth quarter earnings report, expected out after the market closes today, October 18, 2010. Shares are up 0.20% in the early-afternoon session.
Cupertino, CA-based company is expected to report an EPS of $4.06 on revs of $18.86 billion. AAPL reported an EPS of $3.51 on revs of $15.7 billion. The innovative iPhone inventor reported an EPS of $1.82 on revs of $9.87 for the fourth quarter ended 2009.
Shares of the company have blossomed through the quarter, gaining 14.2% to $283.75 at the end of September. The stock is up about 48% since the start of 2010.
For a simple valuation, the stock is going for a forward P/E of 17.5x FY11 EPS estimates, compared to 10x for Dell (Nasdaq: DELL), 8.5x for Hewlett-Packard (NYSE: HPQ), and 10.9x for Microsoft (Nasdaq: MSFT)
Data from Bloomberg shows that 48 analysts have a Buy rating on AAPL, 3 have a Hold, and none suggest to Sell. The analyst price target consensus is $354 with a high of $430 and a low of $320.
Analyst Ratings Through the Quarter
In August, Needham & Company increased their price target on the company from $280 to $375, while maintaining their Buy rating on the shares. The firm raised their PT solely on he trajectory of iPad and Mac sales, which were higher than they forecast earlier in the year.
Wells Fargo also initiated coverage on the company with a Buy rating and $300 - $3200 valuation range. They cite iPad strength, more iPhone carriers, and ramping Mac units for the move.
Starting September, JMP Securities started coverage on Apple with a Market Outperform rating, and $290 price target.
UBS increased their price target from $340 to $350, which holding on to their Buy rating for the shares.
September also saw Kaufman increase their price target on the shares from $350 to $374.
Summary
After a few calculations, whisper numbers for the company may come in at $4.81 and revs of $19.67 billion based on the Street consensus. The estimates stem from running earnings numbers on Apple since Q108; they have beat the consensus EPS on average of 18.46% and revs by an average of 4.27%. The calculations left out the quarter when Apple made a change to their accounting practices, which absolutely trounced the Street consensus.
BGC Partners sees revs of $19.25 billion and an EPS of $4.09 for the quarter. They note that recent data shows Apple with a 14% unit growth in September, with a 10.4% market share of U.S. computer sales. Mac sales are expected to exceed $5 billion, a new record, compared to $4.4 billion in Q310. They see 1.245 million desktop units sold, 2.765 portable units, 9.3 million iPods, 6.2 million iPads, and 9.35 million iPhones to be sold through the quarter. BGC suggests to buy into any weakness following earnings. BGC has a Buy rating and $350 price target on the shares.
J.P. Morgan sees a Q410 EPS of $4.20 on $18.71 billion in revs, up from $4.01 and $18.13 billion prior. JPM notes that iPad and iPhone momentum didn't slow ending the September quarter. They see gross margins returning to the 40% threshold, benefiting from a decline in component pricing. They see the iPhone going to Verizon (NYSE: VZ)(NYSE: VOD) in early 2011, but that assumption was left out of their numbers. JPM has an Overweight rating and $400 price target on the shares.
The axe in Apple, Gene Munster from Piper Jaffray, thinks that Apple will meet the whisper instead of its usual 'beat.' However, they said this would be fine since there are supply constraints with the iPad and iPhone.
Apple, Inc. is expected to release their Q410 earnings on Monday, October 18, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
Cupertino, CA-based company is expected to report an EPS of $4.06 on revs of $18.86 billion. AAPL reported an EPS of $3.51 on revs of $15.7 billion. The innovative iPhone inventor reported an EPS of $1.82 on revs of $9.87 for the fourth quarter ended 2009.
Shares of the company have blossomed through the quarter, gaining 14.2% to $283.75 at the end of September. The stock is up about 48% since the start of 2010.
For a simple valuation, the stock is going for a forward P/E of 17.5x FY11 EPS estimates, compared to 10x for Dell (Nasdaq: DELL), 8.5x for Hewlett-Packard (NYSE: HPQ), and 10.9x for Microsoft (Nasdaq: MSFT)
Data from Bloomberg shows that 48 analysts have a Buy rating on AAPL, 3 have a Hold, and none suggest to Sell. The analyst price target consensus is $354 with a high of $430 and a low of $320.
Analyst Ratings Through the Quarter
In August, Needham & Company increased their price target on the company from $280 to $375, while maintaining their Buy rating on the shares. The firm raised their PT solely on he trajectory of iPad and Mac sales, which were higher than they forecast earlier in the year.
Wells Fargo also initiated coverage on the company with a Buy rating and $300 - $3200 valuation range. They cite iPad strength, more iPhone carriers, and ramping Mac units for the move.
Starting September, JMP Securities started coverage on Apple with a Market Outperform rating, and $290 price target.
UBS increased their price target from $340 to $350, which holding on to their Buy rating for the shares.
September also saw Kaufman increase their price target on the shares from $350 to $374.
Summary
After a few calculations, whisper numbers for the company may come in at $4.81 and revs of $19.67 billion based on the Street consensus. The estimates stem from running earnings numbers on Apple since Q108; they have beat the consensus EPS on average of 18.46% and revs by an average of 4.27%. The calculations left out the quarter when Apple made a change to their accounting practices, which absolutely trounced the Street consensus.
BGC Partners sees revs of $19.25 billion and an EPS of $4.09 for the quarter. They note that recent data shows Apple with a 14% unit growth in September, with a 10.4% market share of U.S. computer sales. Mac sales are expected to exceed $5 billion, a new record, compared to $4.4 billion in Q310. They see 1.245 million desktop units sold, 2.765 portable units, 9.3 million iPods, 6.2 million iPads, and 9.35 million iPhones to be sold through the quarter. BGC suggests to buy into any weakness following earnings. BGC has a Buy rating and $350 price target on the shares.
J.P. Morgan sees a Q410 EPS of $4.20 on $18.71 billion in revs, up from $4.01 and $18.13 billion prior. JPM notes that iPad and iPhone momentum didn't slow ending the September quarter. They see gross margins returning to the 40% threshold, benefiting from a decline in component pricing. They see the iPhone going to Verizon (NYSE: VZ)(NYSE: VOD) in early 2011, but that assumption was left out of their numbers. JPM has an Overweight rating and $400 price target on the shares.
The axe in Apple, Gene Munster from Piper Jaffray, thinks that Apple will meet the whisper instead of its usual 'beat.' However, they said this would be fine since there are supply constraints with the iPad and iPhone.
Apple, Inc. is expected to release their Q410 earnings on Monday, October 18, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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