The AFB AAPL Price Target Index Advisory (Topic Closed)

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    Posted: 28 August 2011 11:51 AM #31

    DawnTreader - 28 August 2011 09:05 AM
    mbeauch - 28 August 2011 03:10 AM
    Mercel - 28 August 2011 01:33 AM

    FQ3 2011 was a blockbuster.  FQ4 2011?  It’s not so easy to hit two grand slams in a row.


    Apple does not have to hit a grand slam in Q4, it might even be an afterthought. There will never be a quarter like this one where the attention will be on the next. Everyone and their mother knows Apple will come in with great numbers in Q4, the mother of all quarters will be Q1. The extra week should bring .60c to the guidance. Because of this I can see Apple giving guidance over $9 EPS. I would not look for to much of a sell off if Apple gives decent guidance like that.

    FQ1 will be be not only an insane quarter for revenue and earnings, the foot traffic to the retail stores will be unreal. This is a monster quarter coming up.

    As you have noted, in addition to all the new products in new stores, and ‘the cloud, plus

    unprecedented international frenzy for everything Apple, we get that extra week after Christmas in the quarter.  MASSIVE. Other than the week before Christmas this is the best week to have.  All those iTunes redemptions, people loading their stuff to icloud, ooooooh

    [ Edited: 28 August 2011 11:55 AM by Red Shirted Ensign ]

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    Posted: 28 August 2011 01:22 PM #32

    DawnTreader - 28 August 2011 08:57 AM
    Mav - 28 August 2011 04:04 AM

    Sadly, the rumor mill brings its own blend of truth (until Apple can prove it’s shut down credible leaks, which is increasingly difficult to do).  I don’t have much hope of iPhone arriving in fiscal Q4, which makes it all the more puzzling that Oppenheimer would even invoke the spectre of iPhone 5 via “future product transition” language in the CC. 

    There’s no need for a “profit warning” or other explanation if the friggin’ iPhone 5 may not even launch until _late_ October, well into the holiday quarter.  It’d be best done explained after-the-fact - like Oppenheimer did when iPad 2 wasn’t telegraphed in a CC, and there was an sharp sequential drop in iPad sales for fiscal Q2 2011.

    mbeauch:  No guarantee of a TD-SCDMA iPhone 4/5 for China Mobile.  If it’s TD-LTE or nothing, you could be waiting as far out as early 2013.

    There’s absolutely no need for an earnings warning. If the iPhone 4 continues to the end of the quarter as the flagship product the margins will be unreal and unit sales will have continued to climb.

    DT, so you agree then that Oppenheimer had no business talking about a “future product transition” affecting results when Apple is perfectly capable of a solid albeit relatively “disappointing” quarter without iPhone 5’s help?

    As I’ve wondered - so why the heck would Oppenheimer the Conservative even bring it up if there was a chance Apple couldn’t ship iPhone 5 in fiscal Q4?

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
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    Thanks, Steve.

         
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    Posted: 28 August 2011 02:07 PM #33

    Apple II+ - 28 August 2011 03:43 AM

    I’m not convinced on the embargo, so convince me, please.

    I know there has been a competition with rankings showing how much better the independent analysts are than the pros, but that’s just a sideshow, right? We want Wall Street consensus to improve. They’re obviously not doing a great job of it so far, and I don’t expect them to become better out of embarrassment. What’s wrong with letting them see our estimates?

    Agree completely. My daily use of this resource for the last several years has been to inform me to be a better AAPL investor. The quarterly smackdown has been a feather in the caps of those here providing earnings estimates, but lets not make competition with WS analysts the goal. Besides, they have a viable reason to come in low, given that a miss to the high side may lose them clients.

    Estimates on this board by proven posters is a valuable point of info (one of many) and makes us all question/evaluate our trading positions. I’d hate to lose that data point for a pissing contest against Analysts that most of us have little respect for to begin with. Let them use the data. Maybe if 100% of estimates were spot on, AAPL would finally start trading at a reasonable value.

         
  • Posted: 28 August 2011 02:13 PM #34

    VTBoy - 28 August 2011 05:07 PM
    Apple II+ - 28 August 2011 03:43 AM

    I’m not convinced on the embargo, so convince me, please.

    I know there has been a competition with rankings showing how much better the independent analysts are than the pros, but that’s just a sideshow, right? We want Wall Street consensus to improve. They’re obviously not doing a great job of it so far, and I don’t expect them to become better out of embarrassment. What’s wrong with letting them see our estimates?

    Agree completely. My daily use of this resource for the last several years has been to inform me to be a better AAPL investor. The quarterly smackdown has been a feather in the caps of those here providing earnings estimates, but lets not make competition with WS analysts the goal. Besides, they have a viable reason to come in low, given that a miss to the high side may lose them clients.

    Estimates on this board by proven posters is a valuable point of info (one of many) and makes us all question/evaluate our trading positions. I’d hate to lose that data point for a pissing contest against Analysts that most of us have little respect for to begin with. Let them use the data. Maybe if 100% of estimates were spot on, AAPL would finally start trading at a reasonable value.

    +1

         
  • Posted: 28 August 2011 02:59 PM #35

    I just have a hard time believing their being so wrong for so long with no good cause. There’s a conspiracy theory in there somewhere.

         
  • Posted: 28 August 2011 03:29 PM #36

    danthemason - 28 August 2011 05:59 PM

    I just have a hard time believing their being so wrong for so long with no good cause. There’s a conspiracy theory in there somewhere.

    There are NO consequences to being wrong on the conservative side in this industry.  You have a company that is truly unprecedented in technology, plus a visionary founder who could leave at any time.  This means lack of comparables combined with a monster elephant in the room.  So as an analyst you have two choices:

    1.  Don’t stick your neck out just like all your peers.  If you are wrong, so what?  Everyone else is too. 

    2. Stick your neck out and stand out from the crowd, by releasing estimates that actually make sense.  Well you might be right, but if Job’s leaves in the meantime, you could be wrong.  So there you are as the only guy in the industry who convinced his clients to invest in Apple when they shouldn’t have.  You become a laughing stock and risk your 7 figure salary package.  If you end up being right, what is in it for you personally?  Not much I bet.

    These guys get to keep a pretty nice status quo by being mediocre.  I think they see very little personal upside in being right, and I bet a lot of them KNOW that their forecasts are going to miss on the low side.  But there is no consequence or pain in being wrong quarter after quarter after quarter ...

         
  • Posted: 28 August 2011 03:37 PM #37

    danthemason - 28 August 2011 05:59 PM

    I just have a hard time believing their being so wrong for so long with no good cause. There’s a conspiracy theory in there somewhere.

    They are at least better than the CFO. The ultra conservative guidance from Peter has to be blamed for part of it too.

    We are at 25.26 eps ttm. 12 months ago Wall St analysts were not projecting even 20. Very frustrating indeed.

         
  • Posted: 28 August 2011 03:40 PM #38

    Mav - 28 August 2011 04:22 PM

    DT, so you agree then that Oppenheimer had no business talking about a “future product transition” affecting results when Apple is perfectly capable of a solid albeit relatively “disappointing” quarter without iPhone 5’s help?

    As I’ve wondered - so why the heck would Oppenheimer the Conservative even bring it up if there was a chance Apple couldn’t ship iPhone 5 in fiscal Q4?

    I don’t think the quarter will be disappointing at all. But it may take $10 eps off the radar screen for the period due to the iPhone 5 launch pushed to the December quarter.

         
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    Posted: 28 August 2011 04:25 PM #39

    adamthompson3232 - 28 August 2011 07:10 PM

    It is clear to me that many of us (me too, at first) struggle with the idea that a new product launch doesn’t matter nearly as much as we have been trained to think over the years. Apple proved last quarter that it has multiple levers it can pull to boost sales. Introduction of a new phone is just one of those levers. Since iPhone was only on 220 carriers as of the end of the June quarter there is still the “carrier lever” left to pull even without a new phone. There will be a sequential increase in iPhone units sold even without a new phone this quarter and I think the sequential growth might even be greater without a new phone than with one. Yeah, it sounds crazy but Apple proved it last quarter and they likely will again. I am not concerned at all anymore about launch timing as long as it comes in October sometime.

    I remember six months or so ago writing that the holiday quarter would get us $40B+ in revenue. At the time many were skeptical. Now, I would be absolutely shocked if revenue for the holiday quarter is less than $50B. Wow, how things have changed.

    Conclusion - Buy all the AAPL you can at every opportunity. Apple is about to unleash a revenue and EPS storm the likes of which WS has never seen.


    Keep pounding the message Adam, your flock will grow. Maybe you need a voice like James Earl Jones.  LOL

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    Posted: 28 August 2011 04:47 PM #40

    Lstream - 28 August 2011 06:29 PM

    There are NO consequences to being wrong on the conservative side in this industry.  You have a company that is truly unprecedented in technology, plus a visionary founder who could leave at any time.  If you end up being right, what is in it for you personally?  Not much I bet.

    These guys get to keep a pretty nice status quo by being mediocre.  I think they see very little personal upside in being right, and I bet a lot of them KNOW that their forecasts are going to miss on the low side.  But there is no consequence or pain in being wrong quarter after quarter after quarter ...


    I have to disagree with this. Mr. Guana has gone out on a limb to try and differentiate himself from the pack. For this I applaud him and respect him even though I believe him to be wrong. If you are an analyst and actually projected AAPL right you would set yourself apart from the others. This would get massive attention from Baron’s, Fortune, WSJ, etc… Distinction with excellence, what a novel idea. Even though being mediocre is taught in schools now, it is a pitiful existence. If we were all taught to try to be the very best at what we do, society as a whole would benefit. This is why I complain about my government, it does not lay the groundwork for excellence, it sets the table with less than mediocre.

    Lstream, I know I can be off putting sometimes, but I am not one to sing with the choir, I want to think for myself, voice my opinion and try to be the best everyday, I also hate to be wrong, but will admit when proven. I remember several years ago Gene Munster was this guy who was a leader among analyst. He seemed to get the whole Apple story, was always way ahead of other analyst in his price targets even though he caught some serious heat for this. He distinguished himself, along the way had a following in the AFB and all of our respect, now he has become just another analyst. In his defense, 2008 messed him up really bad and I can see the scars from years past on him today. The last 3 years have aged him, not sure other see it, but I do. You did make a point about consequences and I will agree with you that there are no consequences for them being so wrong. They scoot their butt into their bosses office the next day and give them reasons that it was none of their fault. Pathetic. OK rant over.

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    Posted: 28 August 2011 04:48 PM #41

    DT, $10 EPS was never gonna happen unless iPhone 5 launched in late June or something…

    AT, the production ramp is everything.  Apple has shown relative “ineptitude” in this regard (note the quotes - I know damn well manufacturing iPhone 4 wasn’t easy at first, and this may well hold true for iPhone 5). 

    iPhone 5 will most likely send iPhone sales into the 40-50 million units/quarter stratosphere.  Eventually.  That’s the key word.  iPhone 4 is undoubtedly holding iPhone sales back, and we don’t have a clue of initial production capacity for iPhone 5. 

    I’m almost shocked Apple has effectively been sitting on such a huge cache of A5 chips for so long.  It’s a lucky thing Tegra 2 is such a relative weakling, and that Android version Ice Cream Sandwich, by attempting to blend Honeycomb and Gingerbread together, will almost certainly be a more confusing and clunkier OS than hoped.

    The longer Apple waits to launch iPhone 5, the more doubts I have about iPhone sales being much over 30 million for the holiday quarter.  Lucky for us, 30 million iPhones sold in the holiday quarter still gets us about $9B more in revs YOY before accounting for any other rev growth.

    [ Edited: 28 August 2011 04:52 PM by Mav ]

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 28 August 2011 05:27 PM #42

    I would really regret seeing an embargo of AFB estimates until completed as I think the various posts and commentary help us all develop and refine our individual perspectives. Who exactly are we trying to hide the numbers from? Who benefits from an embargo?

         
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    Posted: 28 August 2011 05:36 PM #43

    DawnTreader - 27 August 2011 11:45 PM
    Mav - 27 August 2011 08:18 PM

    DT - I know, I’m only an interested observer now, but I was wondering - is there an embargo policy as far as posting price targets and/or estimates here before publication dates, so as to not give WS analysts cheat sheets too far in advance?

    That’s the primary motivation.

    Well PurpleApple, you can always ask DT about this.

    There’s nothing preventing anyone from discussing estimates in more general terms, or asking for more color on specific elements of estimates. 

    OTOH, I prepared my early fiscal Q4 estimates some time ago.  Once the Excel/spreadsheet is up and running the estimating process is actually pretty quick.  It’s understandable for the newbies to have questions, but for those of us with 1 or more quarters of estimates under their belts, there’s no need to be leaning on anyone for hints.

    [ Edited: 28 August 2011 05:40 PM by Mav ]

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 28 August 2011 05:47 PM #44

    Do we seriously care about giving WS a cheat sheet? It seems like a constant source of frustration for AFB members is how low WS estimates are relative to reality. Why would we want to feed that further? I just don’t get it.

    In my view, AFB should primarily be about benefiting its members and their understanding of AAPL and Apple, not utilizing embargoes and other strategies to somehow differentiate ourselves from the WS analysts. Pissing contest should not be the focus. I would rather learn from and contribute to this forum in way that benefits all members and others interested in AAPL.

    I fear AFB is about to lose some of its intrinsic value in a bid to improve its brand on the Internet, which of course has no real value since we aren’t trying to monetize this in any way.

         
  • Posted: 28 August 2011 05:55 PM #45

    I fear AFB is about to lose some of its intrinsic value in a bid to improve its brand on the Internet, which of course has no real value since we aren?t trying to monetize this in any way.

    Actually I thought there was a monetization effort underway.  There were some threads a while back that encouraged the high profile people here to get out there and start their own blogs.  Most people that have blogs or want to start one, have monetization ambitions I believe.  That was my understanding anyway.  The other benefit would be to combat all the uninformed FUD out there about Apple I guess.