Analyst: Apple’s Back-to-School Mac Sales Strong

| Apple Stock Watch

Apple Computer is having a good back-to-school buying for its Mac platform, according to American Technology Research analyst Shaw Wu. In a research note to clients obtained by The Mac Observer, Mr. Wu raised estimates for Mac unit sales during the September quarter to 1.37 million units, up from 1.32 million units estimated before.

He is also raising revenue estimates to $3.7 billion (up from $3.64 billion), and earnings estimates to $.39 per share, up from 36 cents per share. Appleis guidance for the September quarter lies at $3.5 billion in revenue and $.32 per share in earnings.

At the heart of todayis increases is the firmis belief that Apple is "benefiting from a strong back-to-school period where students need a personal computer today, and Macs remain the preferred PC platform for managing documents, music, photos, and videos."

On the iPod side of Appleis business, Mr. Wu told clients that iPod nano sales are "good, albeit not great." According to his research, the black nanos are selling well, while white units "lag."

"We are hearing that AAPL grossly underestimated demand for the $249 black 4 GB iPod nano and is realigning its supply chain to meet this demand dynamic," he wrote.

ATRis 12 month price target for AAPL is also being raised to $45 per share, up from $42 per share, but far below the $53.50 range the stock is trading today. The target price is based on a 20x multiplier on estimated profits for fiscal 2006 ($1.76 per share), along with $9 per share in cash holdings.

Mr. Wu is maintaining a "Hold" on Apple, largely due to concerns about over-valuation in Appleis already high stock price. Appleis price to earnings ration (P/E) is 45, which is a very high ratio. In comparison, for instance, Dellis P/E is 25.

Apple stock is trading higher in early afternoon trading at $53.57, a gain of $0.93 (+1.77%), on moderate volume.

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article. ?

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