According to a note to clients this morning, Piper Jaffray analyst Gene Munster explains that the key question for Apple now is, are we seeing the company’s Earnings Per Share (EPS) upside or is this sustainable?
Munster believes this is not Apple’s peak EPS, as he believes that Apple is entering what will be the 3 strongest quarters in the company’s history with catalysts such as:
• iPhone in June
• New product in Jun/Sep (6G iPod, Mac tablet, or some other new consumer product)
• Continued Mac market share gains.
According to Munster, Apple has the lead position and is capitalizing in a shift in computer buying behavior. It is obvious consumers want computing devices that are focused on entertainment and creativity. To date, Apple have not seen any credible competitive threats in their core markets. Munster writes, “To date, we have not seen any credible competitive threats in Apple’s core markets (Zune is a flop in the MP3 space and Dell & HP have failed to deliver PCs that rival the Mac). We believe that in the coming quarters Apple will hold its massive lead in portable audio and grow share in the personal computer market.”
Munster maintained his “Outperform” rating on AAPL and raised his price target to $140 from $123.
One error: Zune isn’t a flop, it’s a plop.
I bought $5000 of AAPL when it was at $10. Go AAPL!
“Zune is a flop”…
I can just read that over and over, can’t you?
Microsoft, Dvorak etal have been silent for almost a month.
Either out of chairs or ideas. Expect an earnings near miss today for MSFT.
The thing that makes posting as a miserable PC troll difficult is that Apple bashing is falling out of fashion. Sure you still get the “Macs suck for games”, “I can build a killer PC for a hundred bucks”, or “Apple ≠ enterprise computing” stalwarts, but more of the computing public is catching on, both on a professional and consumer level.
I can’t help but look back on the
” rel=”nofollow”>dark days in the 90’s or just a few years back, during a meeting with a customer’s IT staff, I pulled out my iPod and they all snickered. I swear these guys were John Hodgman’s brothers. The multitude of ridiculous and ignorant PC comments online regarding Apple have certainly been entertaining.
Now I stop by an Apple Store and it looks like 3 new MacBooks + 2 new iMac are sold during my 1-hour visit. Every time. Even a few Microsoft-centric bloggers are occasionally writing the truth as the argument has become obvious and undeniable—even to them.
I don’t know about “tipping points” or how long the good news will continue but I’ll enjoy it while it lasts.
Wow, the anal-ists are starting to wake up and smell the coffee. I guess it has to be plain as day before they will “go out on a limb”.
And these guys want my money!
Ka-ching.
An earning miss from MSFT would make my week!
My uncle bought Apple Computer stock when it first became available back in the late 1970’s(?). It was gifted to him, and very quickly made him quite rich.
I wonder what that stock would be worth today? I am not very stock savvy, but I would imagine that holding onto such a stock would prove to be quite valuable.
But that’s just a guess on my part. Now I wish I had some Apple stock….
Piper Jaffray analyst Gene Munster has always been strong on Apple. He’s one of the few good analysts.
Nobody can deliver a PC competitor to the Mac because nobody else has the OS + the design. Just Windows in a stupid box.
“It is obvious consumers want computing devices that are focused on entertainment and creativity.”
Its obvious to me that people what computer that work!, I overheard a lady yesterday saying she just reloaded Windows for the 7th time on her computer…that would make me crazy…I think the rest of the world is feeling the same, people want to used products that work.. Apple delivers. simple as that
Not saying anything negative about Apple here, but they will need some outrageous quarters to justify such a price. They are over $35 P/E right now. That’s trailing P/E, of course. Leading P/E – the number you can only see in retrospect – is in the low to mid $20s. Even that is half-again the usual even for a hi-tec monster like Apple. Some analysts think this growth can go on forever. It can’t, you know. It tops out at 100% of the market – not the market for computers, the market for computers in Apple’s price range. Apple does not have 20X of possible growth, it only has 4X to 6X of possible growth – that, or they change their market range.
That said … expect the stock to split before then. I expect Apple has been planning a split for some time now and was surprised by this surge in the price of their stock.
DLMeyer – the Voice of G.L.Horton’s Stage Page Pod-Cast
DLMeyer=spammer
DLMeyer speaks sense, not spam.
that “market range” DL mentions is going to change as Apple grows, its prices will invariably drop. The place where the puck’s going looks like an orchard full of Macintoshs, excuse the mixed metaphors-couldn’t help myself.
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“They are over $35 P/E right now.”
You don’t really understand P/E, do you?
DL, I agree with you in general, but Apple does keep pulling one trick after another with regards to its post-millenium efforts: It keeps finding new products with new market share, and products with extremely high profit margin, to boot.
Which means I would seriously think twice before second-guessing how much more potential there is in their earnings. I’ll be the first to admit that when the iPod first came out, I was dubious how big a market there would EVER be for portable music players. Well, shut my mouth. Hundreds of millions!!?? Of course, they also managed to grow the iPod market both horizontally (selling them over a wider audience) and vertically (by selling a wider range of iPods and iPod add-ons, again all at phenomenal margins, and without undercutting their own market).
And that is another thing that I don’t see mentioned very often, by the way – Apple’s keen ability to expand market share of a product without undercutting itself. Forget about the Dells, the Zunes (no, seriously forget about them, everyone else has) undercutting the Apple market, many companies bring their own margins down through offering competing products at lower prices. Apple is really good at holding back features, tagging prices just right, and introducing new upgrades when the market is past peak and it’s time for a refresh.
You can take all the genius in product design and interface programming and integration… and add this keen business sense to the mix. No wonder Apple’s getting so much press.
Expect Apple Stock to triple or quadruple over the next two years. their market cap will exceed M$ by 2010 or sooner. Nobody and I mean nobody has the vertival market intergration theat Appple has.
This is a B school case study! History in the making.