15 Analysts Independently Raise EPS Estimates For Apple!

by , 5:15 PM EDT, July 21st, 2000

>Charles Schwab, a major brokerage firm, sent an exclusive e-mail alert to their larger clients yesterday noting some recent changes in the ratings on Apple's stock from the analysts that follow AAPL.

According to Schwab, "More than one analyst revised their earnings estimate for this year in the same direction in the last 24 hours. 15 Analysts increased their annual earnings estimate. The Consensus Estimate changed from $1.83 to $1.84."

Wall Street is impressed with MACWORLD

Reuters quotes Bear Stearns analyst Andrew Neff:

"We went to the keynote (speech) somewhat jaded, figuring that we were expecting a surprise, so what could he do to impress us. Despite this attitude, we were impressed with the G4 Cube, an 8 inch cube that fills the gap between the consumer-oriented iMac and the professional-oriented PowerMac."

Mr. Neff has a price target of $80 for AAPL and raised his estimates of annual earnings per share to $1.84, up from $1.80.

SG Cowen analyst, Richard Chu, upgraded Apple to a "strong buy" from a "buy" today and told Reuters, "With prospects for 20 percent-plus annual growth, proven streamlined execution, potential for more aggressive monetization of Mac customer base, and what appears to be a wide-open playing field for future innovation, Apple stock is compellingly cheap."

Mr. Chu believes that Apple will ship 150,000 G4 Cubes this quarter and units shipped will trend higher from there.

However, CNET reports that some analysts do not grok Apple's strategy of placing two processors in the high end Power Mac G4s. Some apparently think it's a ploy allowing Apple to claim a speed boost at the professional hardware level that Motorola and IBM could not provide with a single G4 processor. The skeptics claim that most applications can not take advantage of the second processor.

For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.

The Mac Observer Spin:

While a small upward revision in Apple annual earnings per share isn't going to send the stock much higher in itself, the fact that 15 analysts on Wall Street have suddenly reached similar positive conclusions about Apple just after MACWORLD is significant. These analysts not only make recommendations to retail investors but also influence the trading propensities of their respective firms and this could lead to a major uptrending in AAPL during the next few weeks -- providing the larger macro-environment on Wall Street remains positive as well.

Finding 15 stock analysts that agree on the time of day is a remarkable feat, much less finding 15 that agree on AAPL's EPS direction. This remarkable consensus can only be attributed to the insanely great product lineup that emerged from Steve Jobs' keynote address on Wednesday combined with the tight ship Apple's chief financial officer, Fred Anderson, presented to analysts during the recent earnings announcement.

As for the dual processor G4 skeptics, they missed an obvious point: The G4 Cube is the new mid-level computer from Apple. Without boosting the Power Mac G4 to extreme machine power levels the G4 cube would merely cannibalize Power Mac G4 and iMac sales adding little or nothing to Apple's bottom line. While some cannibalization is inevitable, the new dual-processor status of the high end G4 should mitigate much of the downside risk of lost sales while providing the super-pro machine that high-end Mac users have always wanted. The new G4 dualies will also be firmly in place for the introduction of OS X beta later this summer.

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