by , 3:45 PM EDT, October 14th, 2004
Following Wednesday's financial earning report from Apple, seven Wall Street analysts have raised their target price and earnings estimates for the company. Credit Suisse First Boston, Bear Stearns, JP Morgan, First Albany, Standard & Poor's, Banc of America Securities, as well as Merril Lynch, have all issued comments for their investors, and two analysts raised their rating on the stock.
Credit Suisse First Boston
Credit Suisse First Boston (CSFB) raised its 12 month target price on AAPL to US$40 from $35, though Apple's stock is currently trading at more than 45. CFSB noted that the "iPod showed no signs of slowing down, and that "iPod shipments of two million increased 500% over the year-ago quarter as supply constraints eased and expanded distribution opened up a larger percentage of the market."
CFSB raised its fiscal 2005 estimate on AAPL to $1.17 per share, and the firm expects Apple to post some $10.75 billion in revenue for the year. That is up from 88 cents per share in earnings on $9.3 billion in revenue. For 2006, CSFB sees earning of $1.40 per share, on revenue of $11.3 billion.
Bear Stearns
Long time Apple doom sayer Andrew Neff of Bear Stearns raised his rating from "Peer Perform," to "Outperform." An outperform rating means that Mr. Neff thinks that Apple will outperform the general markets. In comments accompanying his rating, he said that Apple's "superior execution, strong operating leverage from its high-growth music biz and multiple product cycles and potential for year-end seasonal strength."
In the past, Mr. Neff has said that Apple needed to move the Mac platform to the Intel processor, and that the company would be bought during what he thought would be a wave of consolidation in the industry.
JP Morgan
Bill Shope of JP Morgan upgraded Apple's stock to "Overweight," up from a "Neutral" rating. An "Overweight" recommendation means that Mr. Shope thinks his clients should have AAPL occupy a larger percentage of their portfolio than normal.
In his research note, he said "there may be substantially more upside left for investors." He also cited the possibility of a halo effect for Mac sales finally kicking in, and said that Apple's dominance of the digital music market could last well past year.
First Albany
First Albany analyst Joel Wagonfeld reiterated his "buy" rating for AAPL. In a research note issued this morning, Mr. Wagonfeld noted Apple's iPod success, and said that the company's earnings were ahead of expectations.
Standard & Poor's
Megan Graham-Hackett of Standard & Poors is maintaining a "Hold" rating on AAPL, but raised her earnings forecast for fiscal 2005. Ms. Graham Hacket said the following in her research note:
"September quarter non-GAAP earnings per share of 27 cents, vs. 8 cents beat our 17 cents estimate, as revenues grew 37% to $2.0 billion, 5% above our forecast. The iPod led this growth, with units up 500%, but Mac-related shipments were below our model. We are raising our fiscal 2005 (Sept.) earnings per share estimate -- based on our higher iPod-led revenue forecast for the December quarter -- to $1.60 from 78 cents, and raising our target price to $42, from $32, or 26 times our fiscal 2005 estimate. While iPod is a clear success, we think much of its future potential is built into Apple's above-peer valuation. Still, with $13 a share in cash and short-term equivalents, we view Apple as worth holding."
Banc of America Securities
Banc of America Securities maintained its "Neutral" rating on AAPL, but raised its target price for the stock to $46 per share from $44.50 per share. Additionally, the firm's estimates for the December quarter were raised to 40 cents per share from 34 cents per share. Fiscal 2005 estimates were raised from $1.14 to $1.23 per share.
Merrill Lynch
As we reported this morning, Merrill Lynch analyst Steve Milunovich raised his target price from $44 per share to $49 per share, and his earnings per share estimates from 95 cents per share to $1.20 per share.
Apple's stock is currently trading at 45.23, a gain of 5.48 (+13.79%), on stunningly high volume of almost 45 million shares trading hands.