Ticonderoga Maintains a 'Buy' on Apple (AAPL); Barometer Beats Historical Averages in May, Sales Rise 10% M/M
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Price: $305.93 --0%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 16 | New: 19
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 16 | New: 19
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Ticonderoga maintains a 'Buy' on Apple (NASDAQ: AAPL), PT $612.
Ticonderoga analyst says, "For the suppliers that make up our Apple Barometer, the months of April and May are generally muted following a strong March. However, this year, May sales rose more than average, indicating strong trends at Apple, in our view. For example, final May sales for the Apple Barometer rose by 9.6% M/M, well above the six-year average May sales increase of 2.2%. Despite a slowing economic environment, the combination of strong sales trends for the Apple Barometer in May and our recent research during the Computex Show in Taipei provide us with continued optimism around Apple."
"With more signs of a slowing economic environment and indications that tech demand is weakening, Apple's stock has pulled back with the tech market. In our view, no company is entirely immune to a meaningful economic slowdown; however, we believe Apple has the best product cycle in tech, and the company's performance in the last downturn was head and shoulders above the group. In fact, Apple grew sales by 40% in CY08 and 20% in CY09, while GAAP EPS increased by 62% and 38%, respectively. To put this in perspective, it was not unusual for tech OEMs to experience 20-30% sales declines during the downturn. At the same time, Apple is trading at 9.4x our CY11 GAAP EPS estimate (ex-cash). By the end of FY13, we estimate Apple will hold $136.8 billion in cash or approximately 45% of the current market cap. Essentially, if there is just ONE tech company to own right now to have tech exposure but not be overly exposed to the uncertain environment, we believe it is Apple."
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $325.90 yesterday.
Ticonderoga analyst says, "For the suppliers that make up our Apple Barometer, the months of April and May are generally muted following a strong March. However, this year, May sales rose more than average, indicating strong trends at Apple, in our view. For example, final May sales for the Apple Barometer rose by 9.6% M/M, well above the six-year average May sales increase of 2.2%. Despite a slowing economic environment, the combination of strong sales trends for the Apple Barometer in May and our recent research during the Computex Show in Taipei provide us with continued optimism around Apple."
"With more signs of a slowing economic environment and indications that tech demand is weakening, Apple's stock has pulled back with the tech market. In our view, no company is entirely immune to a meaningful economic slowdown; however, we believe Apple has the best product cycle in tech, and the company's performance in the last downturn was head and shoulders above the group. In fact, Apple grew sales by 40% in CY08 and 20% in CY09, while GAAP EPS increased by 62% and 38%, respectively. To put this in perspective, it was not unusual for tech OEMs to experience 20-30% sales declines during the downturn. At the same time, Apple is trading at 9.4x our CY11 GAAP EPS estimate (ex-cash). By the end of FY13, we estimate Apple will hold $136.8 billion in cash or approximately 45% of the current market cap. Essentially, if there is just ONE tech company to own right now to have tech exposure but not be overly exposed to the uncertain environment, we believe it is Apple."
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $325.90 yesterday.
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