Barclays Analyst Reiterates “Overweight” Rating for AAPL

| Apple Stock Watch

Barclays Capital analyst Ben Reitzes has reiterated an "Overweight" rating for shares in Apple Inc. In a research note to clients obtained by The Mac Observer, Mr. Reitzes said that continued checks with retail and other sources continue to point to a solid September quarter, which will be reported Monday, October 19th.

As analysts await Apple's quarterly numbers, several have released research notes either bumping up target prices (Mr. Reitzes did so early in September) or upgrading ratings, with most expecting Apple to report well above the company's conservative guidance of some US$8.8 billion in revenue for the quarter.

Mr. Reitzes own estimates are currently for revenue of $10.8 billion and earnings per share estimates of $2.27. In his research note, he told clients that Apple could make even those estimates appear conservative.

The star of Apple's conference call, however, is likely to be the role that recent accounting rules changes will have on Apple's results. Those rules changes mean that Apple will no longer have to account for iPhone revenues over a 24-month period, but rather at the time of the sale, a change that should make Apple's results more transparent to investors.

"We believe the key focus of Apple's results will be color around the recent FASB decision about changing iPhone accounting, traction of iPhone 3GS including the outlook for adding more carriers, gross margin guidance, and the level of enthusiasm around new products in 2010 including the widely expected tablet device," he wrote.

Mr. Reitzes price target remains at $208 per share, with an "Overweight" rating on the stock.

Shares in AAPL edged lower in Tuesday trading. In the afternoon session, the shares are currently trading at $190.09 per share, down $0.72 (-0.38%), 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.  

Comments

Bryan Chaffin

Not much surprise here, but I think it’s interesting how after so many years of following Apple and the analysts, it seems that everyone has finally gotten on Apple’s bandwagon.  It wasn’t so long ago when that wasn’t the case.

geoduck

Overweight?
I wonder why that’s the term for this. It sounds rather odd.

Bryan Chaffin

Every firm has its own definitions, but Overwieght usually means that the analyst recommends having more of this particular stock than of other companies in the same sector.

Barclay’s exact definition: The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.

I usually put some sort of definition in the article and forgot this time, Geoduck, so thanks for the reminder. smile

Lee Dronick

Overweight?

I hope they that they don’t drop the medical insurance coverage.

geoduck

Thanks for the feedback. I ran across this on Wikipedia that helped clarify things

http://en.wikipedia.org/wiki/Overweight_(stock_market)

I just find it an odd term. Overweight is usually a negative but in this case they’re saying Apple is doing well and you should be ‘overweight’ in the stock.

Bryan Chaffin

Yeah, I wrestled with it when I first encountered it years ago. Those whacky analysts… smile

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