“The Apple product story is kicking into high gear,” Goldman Sachs reports in Barron’s.
“The evidence is pointing to a MacWorld introduction and a calendar first-quarter release for the full-screen video iPod which, according to our checks, is noticeably more innovative than the current generation and should not be considered as a simple refresh,” Goldman Sachs reports.
Goldman Sachs reports, “Apple should formally launch its iTV digital hub at MacWorld which not only creates a new revenue stream for Apple and places the company in a lead horse position in this emerging market but should also increase sales of video iPods as the ability to watch movies and TV shows downloaded from iTunes on televisions as well as video iPods raises the incentive for consumers to purchase the new video iPod.”
“The Apple cellphone should be released to manufacturing in April 2007 for an on-schedule second-quarter launch and will almost certainly break new ground. Indeed, Apple is already in early discussion with multiple suppliers regarding next-generation models of cell phones with no decisions made yet as to which direction they’re going in,” Goldman Sachs reports.
Goldman Sachs reports, “Reflecting strong demand and expected MacWorld announcements, we raised our already-above-the-Street fiscal 2007 estimates on Dec. 11. Our earnings-per-share estimate for fiscal 2007 is now $2.85 versus Street consensus of $2.76.”
“Across the Mac line, Apple seems to have had an exceptional Thanksgiving weekend. Fourth-quarter demand for MacBook and MacBook Pro [notebooks] are running better than Apple’s already aggressive targets. We expect 1.1 million notebooks and 1.8 million total Macs in the December quarter,” Goldman Sachs reports. “Our retail checks point to strong Apple store results both on the Mac and the iPod side. Combined with a higher mix of Macs, higher retail sales should drive upside to our 28.6% gross margin forecast and Apple’s 28.25% target. Based on strong demand, at least one key supplier is allocating even more capacity to Apple and taking it away from other areas.”
“Despite what has been described as a very ‘healthy’ video iPod forecast entering fourth quarter, video iPod shipments seem very much on track, and should be up more than 40% sequentially. IPod shuffle demand looks strong,” Goldman Sachs reports. “With the bias to estimates still upward and Apple about to start a new product cycle, Apple shares could move strongly toward our $102 target price, based on target price-to-earning multiples, growth-adjusted earnings multiples, cash flow metrics, and discounted cash flow — well before our 12-month timeframe.”
Full article here.