Apple shares higher after UBS reiterates ‘Buy’ rating

“UBS‘s Steve Milunovich this afternoon reiterates a Buy rating on shares of Apple (AAPL), and a $125 price target, writing that a third-party survey suggests better results in the December quarter for iPhone 6 sales than he’d previously estimated,” Tiernan Ray reports for Barron’s.

“According to Consumer Intelligence Research Partners, or CIRP, which ‘surveys 500 screened US Apple buyers each quarter,’ all of them in the U.S., writes Milunovich, the latest data from the December quarter showed a rise mix of iPhone 6 among purchases, and in particular, the higher-capacity models,” Ray reports. “As a result of the bullish data, Milunovich is modeling 67 million iPhone units sold in the December quarter, at an average selling price of $685, above the Street consensus he identifies as 65.5 million units at $680.”

“He models Apple turning in $70.17 billion in revenue, with a 38.2% gross profit, for EPS of $2.67. That compares to Street consensus for $67.18 billion, 38.5% gross margin and $2.58 per share,” Ray reports. “Mind you, Milunovich models Apple selling fewer iPads — 22 million versus the Street’s 25 million.”

Read more in the full article here.


    1. It is not about fundamentals! Stock prices vary depending on people’s impressions and beliefs. If many people believe there is value there, they buy it and the price goes up because BUYING PRESSURE IS GREATER THAN SELLING PRESSURE. The opposite is also true and drives the price down. The formulas that people use are all about justification and are not the drivers of the price. Accept this and be happy!

  1. Apple is getting pity valuation from Wall Street. Quite a joke, really. Microsoft’s P/E remains a good deal higher than Apple’s P/E and Google’s P/E is starting to head towards 30 again. I’m fairly certain Apple is doing a lot better than either of those two companies in terms of revenue and profits. Apple has had some decent stock repurchasing plans and the dividends are pretty darn good, but Apple is performing no better than any other popular tech stock over the last few weeks, so I’ll have to see what happens upon earnings and maybe Apple will gain some ground. I’m not expecting too much but at least the stock has been moving in a positive direction as of late so I can’t complain too much.

    Even Amazon has gone up quite a bit recently because some greedy investors must think the company is going to suddenly turn into some great profit machine. I suppose even $.02 worth of profit for Amazon will send the stock through the roof. There’s still the great belief that Jeff Bezos can do no wrong which I find amazing.

    1. That’s the bit I can’t get my head round. Amazon is anything but a profit machine and doesn’t look as though it’s going to make a serious profit any time soon, but Wall Street sees potential and treats the stock accordingly. On the other hand, Apple has been generating massive profits for many years, which are increasing, yet Wall Street doesn’t like Apple very much because it feels that those profits might not keep growing.

      I understand how the perception of future profits is a factor in stock prices, but what I don’t understand is why real and massive profits being generated right now and into the future are felt to be so unimportant ?

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