Wednesday, July 20, 2011

Apple: Analyst Roundup; Ominous New Street-High $666 (AAPL; QQQ)

The stock is trading at $388.13, up $11.28.
From Tech Trader Daily:
Shares of Apple (AAPL) are up $20.87, or over 5%, at $397.72 following much-better-than-expected fiscal Q3 earnings report last night, but a forecast for this quarter that seemed particularly “conservative” by Wall Street standards, falling well below the current consensus.
Price targets are going up all around, as are estimates, with the new high number on the stock being an ominous $666.
Reading the headlines of the morning’s research notes, one senses shock and awe, and perhaps too a little weariness and frustration with the process: the quarter’s results shamed the analysts’ estimates, but the current quarter’s forecast looks a little ridiculous in light of those blow-out results.
Update: As many expected, Apple offered up new versions of its 13-inch and 11-inch MacBook “Air” laptops this morning, starting at $999. The company also unveiled a new version of the Mac “Mini,” a compact desktop-unit that attaches to an external display.
  • Brian White, Ticonderoga Securities: Reiterates a Buy rating and raises his price target from $612 to — Gasp! — $666! White raised his fiscal ’11 estimate to $109.1 billion in revenue and $27.58 from a prior $106.1 billion and $25.52 per share. He raised his fiscal ’12 estimate to $132.1 billion and $31.23 from a prior $130.9 billion and $29.41. “Looking into the second-half of 2011, we believe Apple enjoys the hottest tech portfolio for the back to school season and holidays. As such, we expect this rally to have legs and the 100 plus point uptick in the stock price that we have been highlighting is on track. In our view, the expansion of Apple’s presence in the mobile phone market with the iPhone still remains in the early stages as the mobile Internet ramps around the world with increased smartphone penetration, while the iPad is gaining momentum in a new product category that remains in its infancy and Apple’s PC market share has more room to run.”
  • Bill Shope, Goldman Sachs: Reiterates a Buy rating and raises his price target to $525 from $485. He raised his fiscal 2011 estimate to $107.3 billion in revenue and $27.12 per share in profit, from a prior $105 billion and $25.48, and raised his 2012 estimate to $134 billion and $33.08 from a prior $129.4 billion and $30.67 per share. Regarding that absurdly low forecast, Shope writes, “While the upcoming iPhone refresh justifies some of this tempered outlook, we believe it is still likely that channel fill from the new iPhone will counter some of the iPhone 4 drawdown. In addition, easing constraints and seasonally improving consumer demand could drive far higher iPad shipments than investors were previously anticipating. As such, we have baked in some incremental conservatism into our September quarter iPhone estimates, but our estimates are above guidance.”
Much More

As I said yesterday the numbers were so good that I figured the market might reverse on the news.
Being a big chicken I wouldn't dare short Apple but the QQQ ETF looked tempting. Here are yesterdays's posts:
"Apple Inc. Issues Q4 2011 Guidance Below Analysts' Estimates" (AAPL: QQQ)
Steve Jobs thrilled to deliver revenue up 82 percent and profits up 125 percent (AAPL
 Uh oh: The DJIA's Highest Priced Components Are the Ones That Are Up (IBM; DIA)
A New Way to Value Apple (AAPL)