“When Apple reported its fiscal 2009 first-quarter earnings, exactly three months ago, the stock opened the day at $78.20, its lowest point since October 2006,” Philip Elmer-DeWitt reports for Fortune. “On Wednesday, when Apple is scheduled to report its second-quarter results, the same shares are starting at $121.76 — a 55.7% increase.”
“While that’s still below the price targets set by most analysts — many of whom revised their targets upward in just the past week — some think Apple’s share price has got ahead of itself,” Elmer-DeWitt reports. “RBC Capitol’s Mike Abramsky (an Apple bear) said as much in a note to clients Tuesday. ‘Valuation has risen faster than peers … and while we expect near term upside around the refreshed iPhone, we continue to see elevated challenges ahead to valuation.'”
MacDailyNews Note: RBC Capital Markets is part of the Royal Bank of Canada (RBC). Barbara Stymiest, the Chief Operating Officer of Royal Bank of Canada, is on the Board of Directors of — ta-da! — Research In Motion Ltd. These are simply facts; make of them what you will.
Elmer-DeWitt continues, “Still, Apple is not in the same kind of trouble as its competitors – like Dell for example. Apple still has rich cash holdings ($25 billion, or $29 per share), enviable profit margins (34.7% last quarter) and the deferred revenue from seven quarters of iPhone sales (which could add 30 or 40 cents to its earnings per share).”
“The consensus, according to Thompson Financial, is that Apple will report earnings of $1.09 a share on revenues of $7.94 billion — a 5.7% year-to-year increase in revenue and a 6% decline in earnings,” Elmer-DeWitt reports.
“The pressure is on COO Tim Cook (standing in for Steve Jobs) and CFO Peter Oppenheimer to report Q2 results that surprise the skeptics, chart a path for growth and offer guidance for Q3 that, while dutifully conservative, reflects a little more confidence in Apple’s future,” Elmer-DeWitt reports.
Full article here.
