JP Morgan ups Apple; downgrades beleaguered Dell

“JP Morgan Securities upgraded Apple Inc (AAPL)… to ‘overweight’ from ‘neutral,’ but downgraded…Dell Inc (DELL)… to ‘neutral’ from “overweight,'” Shrutika Verma reports for Reuters.

“Analyst Mark Moskowitz said he favours stocks that could offer relative downside protection to increasingly tenuous IT spending conditions over the next six to nine months,” Verma reports.

“‘We recommend stocks possessing diversified models, a high level of recurring revenues, market share grab potential, and margin protection,’ Moskowitz added,” Verma reports.

Full article here.

The Associated Press reports, “‘We think that Apple’s brand and market share momentum offer meaningful buffers’ to a slowdown in consumer spending, Mark Moskowitz wrote in a note to clients. ‘We expect numbers to come down across the sector, but Apple likely has a backstop beyond the first round.'”

“He believes the iPhone will bolster Apple’s results, eventually comprising 10 percent of sales,” AP reports.

“Due to the weak economy, he cut his estimate for fiscal 2009 earnings to $5.27 per share from $5.35, but raised his estimate for the just-ended fourth quarter of fiscal 2008 from $1.04 per share to $1.06 per share,” AP reports.

“Late Tuesday, research firm Gartner Inc. said Apple kept gaining share in the U.S. PC market, going from a 7.7 percent unit share a year ago to 9.5 percent in the latest period,” AP reports. “Those figures reflect the entire market, not just retail sales.”

Full article here.



  1. On a related topic: J.P. Morgan Chase posted an 84% fall in third-quarter net income to $527 million, or 11 cents a share (compared with $3.4 billion, or 97 cents a share, a year earlier).

    I hope JPM are right in upgrading Apple stock (mine has taken a hell of a beating), but I’m wondering about the survivability of JPM itself. And I’m guessing the NYSE isn’t gonna like it either.

    Should we be fastening our seat belts now?

  2. How much AAPL stock does “Analyst Mark Moskowitz” own? How does he arrive at that conclusion? Not that I don’t disagree but in this day why should we trust these off the way conclusions without more details.

  3. If it wasn’t fastened, like, two weeks ago, you may already have whip-lash!

    The market is in a state of panic at the moment, folks. This may well be the most sensible statement we’ll hear from most of the players this month. Don’t bash them just because they are usually wrong, give them a break for stating what should be obvious. To anyone still lacking a nasty case of whip-lash, that is.

  4. Good point, Mike. Perhaps you can see why Warren Buffet has invested heavily in Wells Fargo. The reason: Wells Fargo avoided high-risk mortgages, derivatives and credit swaps. A couple of years ago, Wells Fargo was derided as being “not with it.” So who’s laughing now?

    The only downside is that Wells Fargo is having to write off bad investments in companies like Lehman Brothers, Fannie Mae and Freddie Mac. If not for this, Wells Fargo would have blown everyone away this quarter.

    Warren Buffet and Charlie Munger ordered all investments using derivatives to be dumped from anything having to do with Berkshire Hathaway some years ago. If you remember in the early 90s, derivatives got Wall Street in trouble. But the idiots like Stan O’Neill at Merrill Lynch started using them again. Nobody really knows how derivatives work; the so-called experts only think they do. And when derivatives and credit swaps go south, as they have in this situation, it’s disastrous.

    In an article published in 1999, Jane Bryant Quinn, a well known financial writer, declared that Warren Buffet was “finished” and “didn’t get” the dot-com boom. She said that Buffet was using old thinking, avoiding the rapid stock price jumps of that day, while Berkshire Hathaway languished. She bought into the whole “eyeballs are more important than profit” BS. Barely a year later, what Buffet could clearly see coming happened: dot-bomb. Jane Bryant Quinn is nowhere to be found.

    Bottom line: there is no substitute for earnings growth. Cash is king. Taking insane risks in the name of quick profits is a disaster. When will we ever learn?

  5. Two observations today:

    1. MDN just LOVES using the word “beleaguered” with Dell. It’s a fitting turnabout-is-fair-play jab at pro-Windows media and at Michael Dell.

    2. When you read the observations of Wall Steet ANALyst Mark Moskowitz, you have to wonder: does this twit speak English? Talk about opaque corporate-speak!

    “‘We recommend stocks possessing diversified models, a high level of recurring revenues, market share grab potential, and margin protection,” said Moskowitz. I guess this means that we will implement new paradigms on a go-forward-basis to improve our workflow from a 30,000 view, whatever that fsck that means.

    Jesus H. Christ! Can’t anyone on Wall Street use plain English any more? No wonder Wall Street is in a shithole.


  6. these analysts don’t even know what deferred revenue means. $5,27 a share in 2009? he must be kidding. the september quarter alone will bring in additional iphone revenue of 60 cents a share (most of it booked throughout 2008/2009) if mac/ipod/iphone sales just stay where they are right now (which means no growth in 2009) even than apple will earn at least $7 a share.

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