Unwarranted Q1 concerns weigh on Apple shares
Analysts for ThinkEquity Partners said Monday shares of Apple Computer appear to be suffering from unwarranted investors concerns over the company's first fiscal quarter of 2007, which runs through the holiday shopping season.
"In the five trading days after our price target raise, Apple shares handily outperformed the Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite Index," he wrote. "That said, Apple shares have since underperformed these indices."
In raising his price target on Apple shares two weeks ago, the analyst noted several fundamental milestones affecting the company, including strong high-end retail segment performance in September due to lower gas prices, high demand for notebook systems and a easing of concerns related to the stock options scandal.
"Given the three fundamental milestones mentioned above, we believe Apple's share price underperformance during the last five days is unwarranted," Hoopes wrote. "Moreover, we believe investors are overly discounting concerns about Apple's performance in the December quarter."
The analyst believes Apple is presently leveraging its core underpinnings in world-class software design. He expects the company over the next several quarters to significantly increase market share, experience above-industry unit shipment and revenue growth, and improve earnings power.
"Never, in the history of the PC, has a company been better-positioned than Apple is at this time to both gain share and improve profitability, in our opinion," he said. "In our opinion, Apple stock is positioned to outperform based on a series of potential quarterly catalysts we highlighted two weeks ago."
For the December holiday quarter, Hoopes is modeling Apple to report 16.8 percent yearly growth to $6.7 billion in revenue, compared to the 12.4 percent growth and $6.5 billion in revenue consensus estimates tallied from analysts who were polled by Thomson First Call.
Hoopes reiterates a "Buy" rating on shares of Apple.
34 Comments
Dang it. Just let the stock fall for a bit to a point where I'm comfortable with another short term investment
"Never, in the history of the PC, has a company been better-positioned than Apple is at this time to both gain share and improve profitability, in our opinion,"
Given Apple's product mix, ie lack of 15" Macbook and mid range tower, I don't see how this possible. Yes I think Apple will continue to rack up nice profits but I don't see a big increase in market share.
backtomac: wait till people realize what a heap of BS vista is.
backtomac: wait till people realize what a heap of BS vista is.
If they swallowwed XP what makes you think they won't swallow Vista?
"Never, in the history of the PC, has a company been better-positioned than Apple is at this time to both gain share and improve profitability, in our opinion,"
Given Apple's product mix, ie lack of 15" Macbook and mid range tower, I don't see how this possible. Yes I think Apple will continue to rack up nice profits but I don't see a big increase in market share.
I agree and I disagree.
I do think we will continue to see growing market share, especially after the launch of Vista and Leopard. Many buyers are in a holding pattern until these come out.
However I agree with you that we would see greater market share gains with a broader line-up of portables. One of Apple's strengths has been their simplicity.
Their line-up is simple to understand compared to DELL's dizzying array of products.
What I would like to see are:
13", 15" & 17" MacTablet
13", 15" & 17" MacBooks
13", 15" & 17" MacBook Pros
An easy line-up to understand but 3X as many choices for the consumer.