Wall Street Saddened By Apple (AAPL) Jobs News, But Says the Show Will Go On

A number of analysts comments are pouring in about news that Apple's (Nasdaq: AAPL) Steve Jobs will step down as CEO. Jobs seeks to remain as Chairman and an employee of the company.

Shares are down 4.6% in pre-open trading on the news.

The consensus appears to be that this news was well expected and investors should buy on weakness.

Goldman Sachs: "AAPL stock is likely to face near-term pressure, but our view has been and remains that Mr. Jobs’ reduced involvement does not change the longterm fundamentals. We reiterate our CL-Buy based on key points that we have outlined before: (1) We expect investors will embrace Tim Cook as permanent CEO; (2) Apple’s platform is now stronger than ever and can be successfully managed by Mr. Cook and Apple’s deep bench; and (3) Apple should enjoy a rich set of near-term catalysts, including a new iPhone and fully available iPad 2 as we head into the peak consumer season; (4) The stock’s current P/E of 11.6X is already a sizable discount to historical averages, and near the 10-year low of 10.6X, while we see no direct risk to earnings from this news." Maintains Conviction Buy List rating, $480 price target.

Deutsche Bank: "We believe Cook is a highly capable executive and deeply familiar with Apples’s business plans, product roadmaps and operations. He has also acted as interim CEO on previous occasions and we see very little near term execution risk.

We expect this news to pressure shares of AAPL (8x EV/FCF and 9x CY11 PE
ex-cash) and we view this depressed multiple likely reflects a lot of this concern. Looking forward, we believe risk is more likely to be centered around Apple’s 3-5+ year product plans if/when Jobs permanently departs." Maintain Buy rating, $500 price target.

Wedbush: "We are saddened to hear about Steve Jobs stepping down from his position as CEO of Apple. However, we remain supremely confident in Tim Cook as a worthy and capable successor who has already been managing the day to day operations. While saddened, we are not surprised to hear about Steve's departure as this had been speculated about for some time.

The change of the guard does not alter fundamentals, and we see a solid product pipeline driving upside to expectations. The reality of Steve stepping down will likely cause a negative reaction in the stock although we do not expect it to be material. We would remain buyers on any weakness as we believe the fundamentals remain intact. We continue to see solid iPhone and iPad sales, PC market share gains, and new products leading to likely solid upside to expectations for 2011 and 2012. Of note, we see an iPhone 4S this fall, an iPad 3, and an iPhone 5 with a materially revamped user interface and 4G early next year. We also believe Apple will move more materially into the "connected TV” space. We would note that Steve will serve as Chairman of the board. The company did not have a Chairman and instead had two Co-lead Directors." Reiterate Outperform $510 price target.

Wells Fargo: "While there is no way to replace Steve Jobs as CEO, we believe he built a brand, strategy, culture, and depth of talent that can carry on his vision. We are more than comfortable with Mr. Cook and the rest of the management team. We believe the company has innovators like Scott Forstall (SVP iOS Software) and Jonathan Ive (SVP Industrial Design) to continue its product excellence. We believe that the company has its product plans set in place for the next few years, and do not expect to see any change in strategy. When Jobs initiated his leave of absence earlier this year, it became obvious to us that there would be a "post Jobs" era. We do not expect there to be any change in the current product roadmap, and still anticipate an iPhone 5 in the fall and a new iPad in early 2012." Maintains Outperform rating, $460-$480 price target/

UBS: "We expect there to be no transition issues as Cook had been running daily operations as interim-CEO. From a longer-term perspective, we believe Apple's strategy is well laid out and believe Cook and mgmt team will continue to execute. From a sentiment perspective, we believe investors have been anticipating this announcement and believe it is reflected in the multiple. We would view any weakness as opportunity given our expectation for strong Sept and Dec quarters. We believe the company should also consider a share repurchase given its cash balance, which we think is generally more of a possibility with mgmt change and which we believe would be a positive catalyst." Maintain Buy, $510 price target.

Jefferies: "In our view, the Street has been anticipating Steve Jobs' resignation for some time now. While many view Jobs as the visionary, we believe the success of the company is also due to its ability to execute. We believe Apple has a long roadmap ahead, and that the new CEO Tim Cook will be able to execute. We believe this event presents a buying opportunity and mgmt may consider a buyback or dividend." Maintains Buy, $500 price target.

Canaccord Adams: "We believe new CEO Tim Cook is well qualified for the role as he has led Apple as interim CEO on two occasions during Jobs’ medical leaves of absence. Mr. Cook is a universally regarded as a strong leader and supply chain expert, and we believe he is well suited to lead Apple to significant growth over the next few years due to Apple’s leading iOS developer and application ecosystems and differentiated products. Further, we believe Apple has a deep and talented executive team in the areas of supply chain management, hardware/software design, and product marketing." Maintain Buy, $515 price target.

For a ratings summary on Apple please visit: http://www.streetinsider.com/rating_history.php?q=AAPL

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