RBC Capital Markets analysts have reiterated their “outperform” rating on Apple Inc. (AAPL) and raised their estimates for the Cupertino computer and electronics innovator.
In a research note published this morning, RBD analysts note that expected changes in Apple’s iPhone business model are likely to accelerate momentum and expand the potential worldwide market.
The analysts expect Apple to move from a policy of carrier exclusivity toward sales of unlocked iPhones for use on consumers’ choice of carriers and envision iPhone subsidies going forward.
RBC’s EPS estimates for FY08 have been raised from $5.37 to $5.40 and, for FY09, from $6.23 to $6.50.
RBC’s target price has been raised to $220 from $200.
[Thanks to MacDailyNews Reader “Richard D.” for the heads up.]
Clueless analysts scurrying around like scared rats raising AAPL as fast as they can to prevent total embarrassment.
The analysts expect Apple to move from a policy of carrier exclusivity toward sales of unlocked iPhones for use on consumers’ choice of carriers and envision iPhone subsidies going forward.
I hate to be Debbie Downer, but that’s nothing but speculation at this point. Not a very firm foundation for their recommendation — not that that’s ever stopped stock analysts.
Speaking of clueless (not to say CRIMINAL) analysts . . .
Check this out:
http://bullcross.blogspot.com/2008/04/shaw-wu-downgrade-reminiscent-of-stock.html
His FY09 estimate shows he doesn’t realize that Apple’s Deferred iPhone revenues will have a major impact in earnings.
So, on Seeking Alpha, I saw a little more on the RBC analyst upgrade, http://seekingalpha.com/article/75696-two-analysts-who-are-liking-apple-now
He expects 24 million iPhones sold in ’09, and yet, he sees earnings of $5.40 this year, and $6.50 next. That’s only 20% eps growth. Doesn’t he realize that Apple is Deferring revenues of the iPhone, and that the full effect of iPhone revenues, thus won’t be felt until FY09? Where’s the effect then?
The fact is, these analysts have NOT modeled in iPhone Deferred Revs properly. If by 09 Apple is fully feeling the effect of iPhone revs, then we should see it in earnings.
Let’s try to calculate the eps effect should be by then. Let’s say by FY09, you average the deferred revs of FY07 and FY08, and get about 12 million iPhones, on an annualized basis. At $400 per unit, that’s $4.8B in annual revs, and about $1.7B in Gross Income, or about $820M in Net Income, or about $0.93 a share.
So, 93 cents of his $1.10 eps growth is coming from iPhones? No, that $1.10 is coming from Macs and stores and iPods, etc. He hasn’t even factored in the iPhone deferred revenues.
Honestly, I can’t say it more than I already have, but people are going to be surprised by Apple earnings, when the full effect of Deferred Revs are incorporated. If the analysts don’t get it, then I doubt the average shareholder does.
Where were all these analysts when the stock was dipping at $130 or thereabouts?
Why weren’t they all advising BUY BUY BUY – Great opportunity?
Why would you suddenly start raising the targets AFTER AAPL has already made its biggest gains of the year to date?
What fundamental shift in strategy or change in results have Apple reported recently to suddenly become a higher-valued stock in these analysts’ eyes?
The answer to all these questions and more can be found in my soon-to-be-published book “Buy High, Sell Low – how to go broke following Investment Analyst Advice”.
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Seriously, these people are generally a joke, and it’s clients that follow their so-called advice that end up buying at the peaks and selling during the drops and losing their shirts.
Most analysts seem to do nothing more than:
1) Follow the stock trends and raise or lower their price targets like sheep after seeing what direction the stock is heading in…
2) Make b.s. pronouncements of gloom and doom when they or someone they are linked to is shorting a stock.
Very sad to see. Oh, for what it’s worth I own no AAPL of any kind, nor do I have any vested interest in the company. IANABroker, don’t listen to me.
Gosh, KenC, you sure are smart!
I’m guessing you don’t work at Walmart?
@blucaso
Actually, every thing I saw had apple listed as a top buy when they sunk down to the 120s from the 199 close at the end of december.