AAPL Up 4% on Canaccord Upgrade to Buy [Update]

| Apple Stock Watch

Shares in Apple Inc. traded higher Thursday after Peter Misek of Canaccord raised his rating on the stock to a "Buy" from "Speculative Buy," and raised his target price to US$136 per share, up from $110 a share. The news helped spur a tech rally begun with excitement over RIM's earnings announcement scheduled for after the market closing Thursday, and AAPL rose more than 4% to close at $112.71, up $4.02 (+3.70%), on moderately strong volume of 28.9 million shares trading hands.

In his research note, obtained by The Mac Observer, Mr. Misek said he raising Apple's rating, " based on positive feedback from our channel and increasing confidence that Apple's product refresh cycle on both the iPhone and Mac could translate into meaningful gains for the back half of 2009."

He said he was raising his sales estimates for Macs for fiscal 2009 from 9 million to 10 million units, including an adjustment from 2.2 million to 2.4 million for the just-ended March quarter. He raised estimates for iPods from 51 million units to 52 million units (including an increase of 9.1 million units to 9.5 million units for March).

For iPhones, he boosted his March quarter estimates from 2.7 million units to 3.1 million units, but for the full fiscal year, he raised estimated just 300,000 units to 17.2 million.

All of these unit sales increases lead to a profit and revenue estimate increase for both the March quarter and the full year.

"As a result," he wrote, "we have increased our F09 revenue target to $36.1 billion from $34.7 billion and our GAAP EPS increases by $0.34 to $4.94. Based on our solid channel checks and upwards estimate revisions, we are raising our target price to US$136.00 from US$110.00."

For fiscal 2010, Mr. Misek increased estimates to $41.2 billion, with an EPS of $5.91.

Shares in Apple had been trading as high as $114.75 (up more than 5%), but gave back some of those gains in the afternoon trading session.

Apple is set to announce its March quarter results after the markets close on April 22nd, 2009.

[Update: This article was updated with additional information from Mr. Misek's research note, and with AAPL's closing price. - Editor]

*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.  

Comments

Terrin

BS. This article implies that a significant amount of Apple share buyers today read what this guy said and based their buying decision based on that. That is absolute crap. Apple’s fundamentals have been strong for a long time. One of the strongest tech companies out there right now. Anybody who knows anything knows that. Apples shares went up because 1) the whole NASDAQ went up, 2) RIM far exceeded expectations, which likely bodes well for Apple, and 3) the powers that be wanted Apple to go up today so they could make it go down again after they make enough money with it going up.

I may not know much, but I know this guy had about zero influence on Apple going up.

Bryan Chaffin

Terrin, I’d be hesitant to dismiss the effect of any analyst. Even the numbnuts have their adherents (I’m not calling Mr. Misek a numbnut)—to wit, I’ve talked to people who think Rob Enderle is the end-all, be-all.

As I noted in the piece, Mr. Misek’s comments about Apple added fuel to the broader rally that began with excitement about RIM expected earnings—it wasn’t the whole picture, but if you took his upgrade on Apple out of the picture, it is quite likely AAPL would not have risen as much as it did.

Indeed, I think it quite likely the broader tech rally wouldn’t have been as large. I think investors took the news that Apple’s quarter was going to be better than (Mr. Misek) expected as a broader sign of the economy.

If Apple’s fundamentals were ever the only thing driving the stock, it wouldn’t have sunk to half its highs in the midst of posting record quarter after record quarter.  The economy, economic indicators, panic, ebullience, fear, hope, and sometimes even analyst comments help to drive every stock, even AAPL.

Bryan
Editor
TMO

Log-in to comment