“Apple has long been known on Wall Street as a volatile stock, and this year’s been no different,” Grace Wong reports for CNNMoney.com. “The company has been hit by the widespread stock options backdating scandal plaguing many tech companies. Some investors have also expressed frustration that Apple hasn’t launched a new iPod in some time.”
“Over the past two years, shares of Apple have far outperformed those of H-P Microsoft and Dell,” Wong reports.
“Shares of Apple are down about 6 percent so far this year and are trading more than 21 percent below their 52-week high,” Wong reports. “But analysts are bullish about the company’s growth potential. According to Thomson First Call, 22 out of 25 analysts rate the stock a ‘buy’ or ‘strong buy.'”
“Analysts at Citigroup said in a recent note that the company could launch a redesigned iPod Nano as early as this month. That could coincide with the Apple Expo in Paris, which runs from Sept. 12-16,” Wong reports. “The company remains the undisputed market leader in digital music, with a 76 percent share of the digital music player market, according to market research firm NPD Group… so far, Apple has been successful in fighting off its competition, said Shannon Cross, an analyst at Soleil-Cross Research. ‘The ‘Apple ecosystem’ lends people to keep buying iPods,’ she said, referring to the slew of gadgets and accessories the iPod has spawned as well as its popular iTunes music store.”
“While Apple is far and away the leader in music, that’s not the case in the personal computer market. Apple has only about a 5 percent share of the PC market in the U.S., according to research firm IDC. But sales have been growing at a double-digit pace,” Wong reports. “Apple’s easy-to-use software, which includes popular programs for managing music and photos, as well as its competitive pricing and reliable operating system, should help the computer maker gain market share worldwide, analysts from Citigroup wrote in a recent note.”
Wong reports, “Analysts said the company’s valuation is justified. ‘Nobody has a multiple quite like Apple, but there’s a good bit of expectation that they’re going to be able to sustain that top line growth,’ said Mark Demos, a research analyst with Fifth Third Asset Management, whose firm owns shares of Apple. Analysts surveyed by Thomson First Call expect sales to jump 19 percent in fiscal 2007 with earnings soaring 27 percent year-over-year.”
Full article with charts and more info here.
Bear Stearns reiterates ‘outperform’ rating on Apple Computer with target price of $88 – August 29, 2006