Jefferies Sees Apple (AAPL) Topping Q1 Estimates, But Releasing Weak Q2 Guidance
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Price: $305.93 +0.22%
Rating Summary:
44 Buy, 29 Hold, 9 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
44 Buy, 29 Hold, 9 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reiterating its Buy rating and $450 price target on shares of Apple (NASDAQ: AAPL) as its expects that the company will report better that expected Q1 results.
The firms current Q1 estimates are $23.03 in EPS and $103 billion in revenue. This is inline with the consensus and Jefferies notes that these estimates are supported by NPD data showing Apple's CQ1 U.S. PC shipments +14% Y/Y vs overall -11%.
Jefferies believes that Q2 will face some margin pressure and gross margins will only be 37%, which is below the streets estimate of 38.4%. The lower margin is due to Apple having to airlift much of its product that typically moves by ship and rail. Additionally some components such as
memory have enjoyed stronger than expected pricing.
The iPad 2 will be Apple's key revenue driver for Q2 and the firm expects the Company to sell 9.4 million in the quarter, versus the street estimate of 7.8 million.
The iPhone 5 is now looking like it will be released in September or October as Asian suppliers still have not received orders for a summer iPhone.
Jefferies comments that, "the strength of the HTC Thunderbolt at Verizon and the likely success of competitively priced LTE Android tablets may indeed cause Apple some heartache if it does not have a response until 2012. We think a Sep/Oct unification launch for iOS devices makes sense and also see an LTE iPad launch in the Fall as a possibility."
The firm believes that most of this news is already priced into the stocks current price.
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $336.13 yesterday.
The firms current Q1 estimates are $23.03 in EPS and $103 billion in revenue. This is inline with the consensus and Jefferies notes that these estimates are supported by NPD data showing Apple's CQ1 U.S. PC shipments +14% Y/Y vs overall -11%.
Jefferies believes that Q2 will face some margin pressure and gross margins will only be 37%, which is below the streets estimate of 38.4%. The lower margin is due to Apple having to airlift much of its product that typically moves by ship and rail. Additionally some components such as
memory have enjoyed stronger than expected pricing.
The iPad 2 will be Apple's key revenue driver for Q2 and the firm expects the Company to sell 9.4 million in the quarter, versus the street estimate of 7.8 million.
The iPhone 5 is now looking like it will be released in September or October as Asian suppliers still have not received orders for a summer iPhone.
Jefferies comments that, "the strength of the HTC Thunderbolt at Verizon and the likely success of competitively priced LTE Android tablets may indeed cause Apple some heartache if it does not have a response until 2012. We think a Sep/Oct unification launch for iOS devices makes sense and also see an LTE iPad launch in the Fall as a possibility."
The firm believes that most of this news is already priced into the stocks current price.
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $336.13 yesterday.
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