Merrill Lynch analyst changes his iTune; says Apple has caught momentum

“Merrill Lynch’s Michael Hillmeyer has been one of Wall Street’s biggest bears on [Apple Computer, Inc.]. But Hillmeyer has been softening his tone of late. He upgraded his recommendation from sell to neutral in early July. And after the Cupertino (Calif.) Mac maker announced a surprisingly strong third quarter on July 16, Hillmeyer conceded that Apple had caught a little more momentum,” reports BusinessWeek Online’s Peter Burrows.

Burrows reports, “After seeing the quarterly numbers, Hillmeyer now looks for Jobs & Co. to bring in $6.75 billion in sales in fiscal 2004, vs. a projected $6.14 billion in the year that ends this September — and up 10% from his previous forecast. Hillmeyer also has boosted his earnings-per-share projection for fiscal 2004 by 16%, to 32 cents. ‘If demand picks up more than people are expecting, there’s a lot of leverage in Apple’s model,’ he says.”

“While sales in Apple’s chain of stylish retail stores are up 100% over the past year, they’re still bringing in just 5% of total revenues — not enough to prevent an overall decline in total units sold. So despite Apple’s “Switcher” ad campaign, aimed at winning converts from the Windows world, not enough consumers are making the move to the Mac for it to gain overall market share. And the stores are still losing money,’ Burrows reports. “In fact, given its large investments in research and development and ts retail-store chain, Apple is just barely in the black on an operating basis. Its operating margins in June were just 0.6%. That’s the second profitable quarter in a row after two in the red — but hardly worth crowing about. And with the stock up 57% since the unveiling of the Music Store, investors have already factored in much of the good news.”

“Still, Apple’s roller-coaster story seems to have taken an upward turn. At the moment, even skeptics like Hillmeyer can’t ignore that,” Burrows writes.

Full article here.


  1. The day I need the opinion of an analyst like Hillmeyer is the day I give all of my computers away and go to the home. Anyone who takes an analyst’s advice deserves what they are going to get.

  2. Apparently, being a stock analyst is a lot like being a meteorologist. You use all of your years of training and experience to predict what’s going to happen, and then you change your forecast after you look out the window and see that you were wrong.

  3. Well this is typical behavior of those who are in-tuned with money alone,
    there mentalities and lack of souls are in-bedded in dire stupidity, how can anyone trust an analyst like this? the stock has jumped from 12 dollars to 21 dollars and now is when he changes his tune? what a poor jack this fellow is! he’s a JOKE. Its also typical behavior of the general bias against Apple caused by the desire of owning one of the bad boys
    yet they are stuck using the MS contraptions. They are so empoverished that even if they were to be given one they would’nt know what to do with it! he’s a FOOL!

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