Bear Stearns: Apple outlook ‘compelling’ and valuation looks ‘attractive’

“Bear Stearns lowered estimates for Apple Computer on Friday to reflect more pronounced iPod seasonality, but maintained an ‘outperform’ rating on the stock based on valuation and foreseen second-half strength. ‘Our view is that investors should take advantage of current weakness, viewing Apple as a compelling second-half play, though the risk is that our outlook is somewhat based on products not announced or seen yet,’ wrote analyst Andrew Neff in a report Friday,” Maya Roney reports for Forbes.

“Neff cut his fiscal third-quarter iPod unit estimate to 8 million from 8.9 million but said Intel-based Macs and music would drive earnings in the back half of the year,” Roney reports. “Neff said Apple’s valuation looked attractive at 17 times his calendar 2007 operating earnings-per-share estimate. He reduced his calendar 2006 target to $90 from $94 but said he remains a buyer of the stock. ‘Apple’s stock is dependent on major new product launches,’ the analyst noted. ‘We’re comfortable that Apple will continue to innovate, which we reflect in its multiple, but the timing and customer reaction are always speculative.'”

Full article here.

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Merrill Lynch increases Mac computer revenue growth estimates – June 15, 2006
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33 Comments

  1. ‘Apple’s stock is dependent on major new product launches,’

    I can’t believe this statement from an investment ‘professional’.

    Apple’s stock moves according to the guidance provided by management, and confirmed by sales of existing products. Nobody in their right mind would buy a stock based on the introduction of some as yet unseen product. Sheesh.

  2. I wouldn’t invest in Apple (or much of anything) right now because the US economy is headed for a recession.

    People can’t buy if they have no extra cash for toys like Mac’s.

    Wages still haven’t come up to meet the new inflation trend.

    The poor working class is paying for the real estate bubble with higher fuel and food/housing costs and no higher pay.

    Of course if the pay goes up so does the prices.

    Ain’t inflation wonderful?

  3. Apple’s stock is dependent on major new product launches,’

    I can’t believe this statement from an investment ‘professional’.

    Well he should tailor it better, it should say this:

    “Making large gains with Apple stock depends upon major successful new product launches”

    Apple’s stock moves according to the guidance provided by management, and confirmed by sales of existing products. Nobody in their right mind would buy a stock based on the introduction of some as yet unseen product. Sheesh.

    Yea existing product sales the stock can go up, but nohing like when the iPod took off.

    Apple’s stock went through the ceiling and they split it a few times too. So much that it was worth more than Dell which sells hundreds of times more computers than Apple does.

    I would wait until Apple stock stabilizes, look at a combination of new products AND the state of the US economy.

    What did it for Apple was people in the US had a LOT of disposable income because of the cheap Fed money tobanks which loaned it out to people dirt cheap, created the real estate bubble etc.

    Now that’s over, people are tightening up, fuel costs are high, inflation is high, cost of living is high, recession is close.

    Not much money for Apple toys now like before.

  4. If you got Apple stock sell, that’s my advice. Get into cash or recession proof investments.

    Sure Apple sells a lot of iPods, but world demand is slowing and that means lower stock from a overinflated price.

  5. Too many of you guys have been reading too many of the Democrat’s blogaganda sties.

    Inflation/recession/whatever. These aren’t good things, but they aren’t catastrophic either.

    The difference between a robust economy and one in recession is about 3% of GDP. THREE FREAKING PERCENT. The world does not stop with a 3% decline in GDP. Most, and I mean MOST, people don’t experience any discomfort from a recession. It’s impact is on a small fringe group, and does not impact all firms equally.

    If a recession does occur it will impact Hewlett/Packard and Dell far more than it will Apple. They each derive a much larger share of their revenue from corporate America, than does Apple. The 2% or 3% of the workforce that finds itself out of work aren’t new computer buyers in any market.

    Couple that with the fact that Apple is gaining share against HP and Dell. A recession won’t change buyer’s platform decisions. To the contrary, those that own a Mac, and a PC, will drop the PC in favor of the dual boot Mac.

    Apple isn’t entirely immune from the effects of a recession, but they will continue to prosper where others do not.

  6. I wouldn’t invest in Apple (or much of anything) right now because the US economy is headed for a recession.

    ‘headed for’? The Canadian Dollar is at like 90 cents. Dude. Look around. You’re in the thick of it.

  7. Apple isn’t entirely immune from the effects of a recession, but they will continue to prosper where others do not.

    Sure they cater to the personal computing market with more disposable income, these type of people always have money.

    But a iPod is a more of a “everyones” device, from the college student to the day worker and these people are going to be very stressed during a recession when other bills have more priority than a new iPod release.

    Now there is talk Microsoft is going to leverage their X-Box with a new iPod killer/music service.

    Dam consoles are a real threat to the personal computing market. Even game dev’s are wanting to go completely over because it’s less of a piracy threat.

  8. wouldn’t invest in Apple (or much of anything) right now because the US economy is headed for a recession.

    Smart investors can make it an almost any market.

    Just stay away from $900,000 McMansions you hope to “flip” in six months & make tons of money in the process.

    A year from now “hot real estate” will have the ring of “hot dot com stock”. “Interest-only mortgage” will sound like “margin trading”. And the realtor house-for-sale sign will look as absurd as the Pets.com sock puppet.

    Maybe the bubble will pop, maybe it won’t. Feel lucky? ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  9. Mr. Thurman-

    You said, “Too many of you guys have been reading too many of the Democrat’s blogaganda sties. Inflation/recession/whatever. These aren’t good things, but they aren’t catastrophic either.”

    Let me tell you a few things: First, if it takes a Democratic blog site to inform you that America’s shitty economy is starting to go down the toilet, you need to pull your head out of your ass and take a look . . . Second, you say things aren’t good “but they aren’t catastrophic either.” Like most younger Americans, you assume that economic catastrophies resemble nuclear explosions. That’s an ill-drawn metaphor. Most economic catastrophies spread like the plague, killing only slowly at first- but they spread quickly, and each wave kills more than any bomb.

    We had a budget surplus 6 years ago. Who thought that was possible when Clinton was elected? I didn’t. Now we have an enormous deficit, with no economic or foreign policy suggesting that it will change. There may have been worse administrations in U.S. history, but I can’t think of any. Grant? Hoover? Time will tell . . .

    Don’t misjudge me Thurman, as thinkers of your type/ilk usually do- I am not a Democrat. The Democrats right now are an embarassment- I haven’t heard a policy idea come out of their mouth in the last 6 years Their only policy/strategy has been to point out that America’s economy and foreign policy/position are collapsing, and they themselves have no power- thus they can’t be held responsible for the fact that Bush sucks like a Hoover. Again, I am not a Democrat- I hate them.

    I just hate Bush and his supporters more.

  10. Just stay away from $900,000 McMansions you hope to “flip” in six months & make tons of money in the process.

    Oh that’s gone by the wayside for sure for most folks, it’s all long term now.

    If one is to buy a $900,000 mansion, it’s in a area were a other of that silk feathers live, then be prepared to sit on it for some time but it will go up regardless, the rich thrive on exclusiveness and pay dearly for the option to get away from the “common folk” ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    I’ve seen houses in those areas for sale empty for as long as 10 years because the owners are wealthy enough not to come down in price, rather driving up the “entrance fee” instead.

  11. CJ and Pete,

    The Federal Reserve runs the economy regardless of what political son of a bitch party is in power.

    Sure the ‘twice elected fool’ or the ‘I need my cock sucked by a intern pervert’ may do some things differently in regards how they either “borrow and spend” or “tax and spend” or who “does something about terrorists” vs “one who pussied out” regardless it all balances out by the all controlling Federal Reserve.

    I don’t much like pure Capitalism or Socialism really. One works us to death for nothing and the other robs us to death to pay someone who doesn’t do shit.

    We lose either way and I give you the great Demoncraft Welfare Mafia run State of RI to prove it.

    Of course the Great “Don’t Messa with” the Neo Nazi Bible Brainwashing State of Texas would be the opposite.

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